Odoo Revenue, Valuation & Funding (2025)

[00:00] Hello, everybody. My guest today is Fabian Pinckas. He is the founder and CEO of a company called Oodo. Fabian, you ready to take us to the top? [00:08] >> Yes. [00:09] Alright. Open source business apps. Tell us more about what you guys are focused on at Oodo. [00:13] >> So we basically do a suite of business apps from CRM, website builder, accounting, manufacturing, inventory. Those are individual business apps, but if you install several, they fully integrate to each others. Yep. We have a SaaS version as well as an on premise version. [00:29] Okay. And if you break down your last 12 revenue versus SaaS versus on prem, how much was SaaS? [00:35] >> It's more or less fiftyfifty. [00:37] Oh, fiftyfifty. [00:37] >> But I would say that even the on premise SaaS, It's just hosted by someone else. [00:43] Got it. So both kind of both SaaS model. And can you give me a general sense of scale today? What are doing per month? [00:49] >> We are in MRR. We are $2,600,000 per month or 65% per year. [00:57] Okay. Sorry, you cut out there. So you're doing 2,600,000 per month? [01:02] >> Yes, in MRR. [01:03] And what were you doing exactly a year ago in December 2017? [01:09] >> In Bing for the year will be around $44,000,000 [01:14] Sorry, what was your growth rate over the past twelve months? [01:17] >> Growth is 64%. [01:20] Okay, 64%. So you were doing about 1,500,000 per month exactly a year ago. Some some something like that. Yeah. And then and then grew that you said 64%? [01:33] >> Yes. [01:34] That's great. Very good. Where did help us understand kind of more about where this growth is coming from? How are you signing up customers? [01:45] >> We do have two channels. One is direct. So on our SaaS platform direct, and we sell with the partners who offer the product on premise. [01:55] Okay. So what kickback? What [01:58] kickback are you paying partners? Is it a twenty, thirty, 50% commission? [02:03] >> It's ranged from 10 to 20. [02:05] Okay, 10. [02:06] >> The smallest have 10 and the largest have 20%. [02:08] 10 to 20%, interesting. Okay, and put all this on before we get too much into the numbers here, this on a timeline for us. When did you launch the company? What year? [02:15] >> I launched the company thirteen years ago when I went back from the university. [02:19] Oh that's great, so 2005. [02:22] >> Yes, and I bootstrapped the company, it was very slow at the beginning. I was alone, second year I was alone, then two people, then four, then eight, so it took a lot of time. [02:32] How many people today? [02:34] >> 600, no, it's five eighty. [02:36] Five eighty, and where is everybody based? [02:41] >> 50% are in Belgium, 30% are in The US, San Francisco. We also have an office in New York and the rest across Asia and Middle East. [02:50] Okay, very good. So Belgium, US, New York City and remote locations. And are you still bootstrapped today or have you raised capital? [02:56] >> No, we raised €10,000,000, so $12,000,000 [02:59] Okay, $12,000,000. And why did you decide to raise? I mean, sounds like you've had a lot of success growing it basically, I mean, with little capital in the company. When did you decide was the right moment to raise? [03:10] >> So when we were 100 people, we were doing 1,000,000 in revenue per year. We wanted to switch the business model because we started as a service company doing implementation service to our direct customer in Belgium, Then and we wanted to switch to a more vendor style business model, selling subscription instead of selling services. So we had to stop all our service activities from one day to another and focus on building the partner network who would do [03:37] >> the service for us. [03:38] So [03:39] >> it was quite risky and at that time, so we raised $4,000,000 do the pivot. [03:45] Interesting. And what year was that? [03:47] >> It was in 2010. [03:49] 2010, okay. And so how many customers do you have today? [03:53] >> 11,000. 11,000. [03:55] 11,000,000 would be a lot. [03:57] >> We we actually have four millions of users because we do have a lot of free users because of the open source nature of Adobe. [04:04] Yep. So if I take your 2,600,000 you're doing per month today, and I divide 11,000 customers into that, that means each customer is paying on average 200 or $300 a month. Is that right? [04:17] >> Yes. Yes. [04:18] Okay. And your current run rate, I can take 2,600,000 times 12. You're doing about 31,000,000 in annual run rate right now? [04:25] >> No, we do more because we have non recurring revenues. [04:29] I see, but just recurring 31,000,000. [04:31] >> Yes. Yeah. [04:32] And the non recurring, what is that installation fees for the on prem stuff? [04:36] >> Yeah, it's implementation service. So import of the data, coaching, customization. [04:42] Interesting. Walk me through how you scale that. How many people on your five eighty person team are in charge of kind of the onboarding one time revenue stuff? [04:51] >> Close to 120. [04:53] 120. Okay. Interesting. And is that a lower? Is that a low? Do you run cohort analysis on people that do have professional services on their account versus not? In other words is lifetime value or churn lower when you do have implementation fees on an account? [05:06] >> Yes, it changes a lot. [05:08] How much? [05:13] >> They don't have a service, we have a churn of 30% on the first year. If they do use the service, we are closer to 15%, 20% depending on the size. [05:22] And blended together, what's your annual revenue churn? Sorry? Blend all your customers together, what's your annual revenue churn? [05:30] >> It's close to 20. What It's decreasing a lot because we changed the business model two years ago. So most of the customer we churn today are the ones who purchased based on the old business model. [05:43] Yeah. Okay. So 20% of revenue churn, I assume that's gross annually. Do you have any expansion revenue? [05:49] >> Yes, it's 30%. So the net churn is around minus 10. [05:53] Got it. Yeah. So 30% net expansion, which means if I take 30% net expansion minus 20% churn, you have a 110% net revenue retention. [06:01] >> Yes. [06:02] Where is most of the expansion coming from? What are you upselling? [06:05] >> Two things, more apps, so they expand in the company, so they would start with a CRM and then they want to use the website or accounting or inventory, and the number of users. Usually they start small and put more people on board. [06:18] One of the things that's remarkable to me, if I've been about your business model, is I mean you have apps for email marketing and invoicing and a CRM. But you could say, okay, how do they beat Mailchimp on email marketing? How do they beat FreshBooks on invoicing? And how do they beat HubSpot's free CRM on the CRM? Because these are companies built basically exclusively around those things. Would you credit your success really to the fact that [06:40] it's all in one? [06:42] >> Yes, if you need one application you have a lot of competition. Like as you said, you need task management you will have Trello and that kind of thing. But if you need two or three apps, there is nobody more. You have to go to the ERP like SAP or Microsoft Dynamics who are very complex. So as long as you need two or three apps, it's much easier to use Odoo rather than trying to integrate different apps [07:05] >> together. [07:05] Yeah. When you when you go out and and sign up a new 100 or $300 a month customer, what's your fully weighted CAC look like? [07:14] >> Say that again? What's the [07:15] What's your fully weighted customer acquisition cost? [07:19] >> It depends if direct or indirect. If we sell directly it's €2,000 or 2.5, $2,400. If it's through a partner it's 1.2. [07:31] Okay, now does that 1.2 include the kickback to the partner? [07:36] >> It's yes. [07:38] Does? It [07:38] >> includes the commission of the partner. [07:40] Okay. And what percent of your new sales are direct versus indirect? [07:44] >> It's fiftyfifty. [07:45] Fiftyfifty. Okay. So if we did get to a blended number, be something like one, you know, 1,800 US dollars [07:54] But even though you have two very distinct cohorts, direct and indirect. So worst case, $2,400, you're going direct. Your payback period there is what about twelve months to get your money back? [08:05] >> Yeah. Actually, it's as we sell per year, most of our contracts, we with the payback is quite is instantly. [08:12] That's great. [08:12] >> Yes. [08:12] I I wanna dive more into where you're spending that money when you do go direct. But first, I have to ask you. You said you listen to the show. Right? Yes. Why do you listen and you know what you're getting into? Why'd you agree to come on? I'm enjoying this, by way, but I'm curious why you agreed to come on. [08:28] >> I think I was curious. [08:30] Curious about what? You want to say, is Nathan a nice guy? [08:33] >> No. I never did the show, so I wanted to know if I could do it or for me, it's more an experience for myself. [08:39] I well, listen. I how do you feel you're doing? [08:43] >> The question is for you, actually. [08:44] I think you're doing I think you're doing great. I think the audience is gonna love You know, it's my job. A lot of people will come on and kind of spout random stuff like we're the best or we're number one. It's much more valuable when someone like you comes on and shares numbers and then lessons on top of the numbers. So let's continue doing that. $2,400 CAC. Where do you spend that money typically? What's the growth [09:03] channel you use? [09:04] >> We don't spend a lot in marketing compared to our competitors. We do spend a lot in the products. So usually the best marketing impact we have is when we release a new version. Every time we release a new version from one month to another, we have an increase of the lead by 20%. [09:21] Okay. And when you say new version, you mean you're adding like a new app like invoicing or you're reworking the whole architecture? No. [09:27] >> We've a big new version. So all the apps are improved at once. We do that once a year. So once a year we have a growth of leads from 20 to 25% just because of the new version. [09:38] Interesting. Okay. When you do like how much money are you spending per month today directly on like paid paid activities? [09:44] >> Oh, nothing. Search and search engine activities maybe 20 [09:49] Okay. [09:49] >> Per month. And some billboard and some other ads maybe 20 k extra. [09:54] Sorry. What was the second one? [09:57] >> Billboards on the the street. [10:01] Oh, billboards. Billboards. [10:02] >> Billboards. Yeah. [10:03] Interesting. Okay. And do they I mean, how do you track if the billboards work? [10:08] >> It's impossible to track. It's just word-of-mouth. We hear people talking about it and that's it. [10:12] Fabian, we saw you on the billboard, like amazing. We signed up yesterday. [10:17] >> We don't know, but we don't spend that much. We spend a few 100 k per year on that kind of thing. Yeah. [10:23] Well, to you, by the way, I look at it as a percentage of revenue, right? So yeah, very small percentage of revenue for you. Now now the the fixed number for someone maybe only doing $10 a month in revenue, that'd be a very large number, but makes sense for where you're at in terms of scale. Are you guys profitable today or no? [10:38] >> Yes. We do $500,000 cash flow positive every month. [10:42] 500 k cash deposit per month. And what do you do with the 500? Is it just gonna sit in your bank account or or how do you choose to reallocate that? [10:50] >> That's my biggest problem nowadays. Yeah. It sits on the back bank account and it's yeah. I think it's an issue. I want to recruit faster, but we we we have difficulties recruiting faster, good developers. [11:01] Would you ever deploy that capital and go buy companies to add to your product suite? [11:06] >> No. It's not our strategy. We prefer to grow organically. Mostly because we have a strong company culture and I'm not sure if we buy it, will just spread the culture. It wouldn't help. We have a way to operate which is very different from traditional companies. I'm afraid that if we buy, we will have complexity merging the two [11:25] Tell me about that. How are you different than other companies in terms of how you're operating your culture? [11:32] >> It's extremely R and D, so everything is managed by developers. No meetings, extremely efficient. [11:42] >> It's difficult to explain. There is no manager, it's mostly leaders and the people have more power than the manager usually. And so if someone comes with a title, nobody will listen to him. [11:54] So of your five eighty, how many are engineers? [11:58] >> 50%. [11:59] 50%. Okay, so over kind of two seventy, two eighty are engineers. And let's say like break down the team that builds out your CRM app. Like who's the leader and how many team members and how do they work together? [12:13] >> We are not organized per app. We have organized across all apps. So if you take one app like Mailchimp to Send Email or Task Management, I would say 85 of what you have to do to build this app is generic. You need a mobile interface. You need to have a front end with drag and drop stuff, the UI. You need a back end and you need the subscription mechanisms to make your customer pay. All those things [12:43] >> are generic. So what is very specific to an app is like a CRM is probably 5% of the value is in this really in the CRM, the rest isn't the same. Yeah. So our team are more transversal. We do have people focus on some big apps like accounting and I think I have 10 people maximum, which is one of the biggest. [13:02] Interesting. Tell me quickly about your pricing page. It's one of the more unique pricing pages I've seen where I put a number of users at the top and then you have about 30 different checkboxes of things I can check to add on my apps. Then you have extra integrations like FedEx, DHL and EasyPost and eBay. I mean, is this page effective for you? [13:20] >> Yes. It took us a lot of years to understand the right way to do it. So basically we have two axes. One is per user, and you pay according to the number of user, and one is per application. So like if you need a CRM, it's a few dollars. If you need an accounting, it's a few dollars. Not related to the number of user, but if you and then you have a price per user. [13:42] And then you essentially, it's a matrix and you multiply the two and that's how you get your price point. [13:45] >> No, we assume the two, not multiply. [13:48] You sum them both. [13:52] Yes. If I put 10 users in though, right, and I select your invoicing at $12 a month and your sales at $12 a month, you're saying, I mean, it would take so 12 plus 12 is 24 times the 10. Correct? 10 users. [14:07] >> No, it's not times. It's plus. [14:10] I'm confused. You're multiplying users times the total sum of all the per seat. I mean, that's what your things doing right now. I'm looking at my screen 10 users for two products each $12 a month. It's $24 a month for invoicing and sales for 10 users. Yeah, [14:26] >> you have 10 users plus $20. [14:30] >> I don't have the same number because the numbers depend on the countries. [14:34] So you're saying the total pricing would be $30 a month? [14:37] >> Let me check I will check-in your country in United I [14:41] think this might be a language thing that you and I are getting tripped up on because your pricing your pricing page is telling me 10 users times 24 is $2.40 then a user discount of $40. The total per month is $2.36. [14:54] >> What app did you choose? Yeah. Invoicing and [14:57] I just want to get to the point of you're multiplying number of users times [15:01] >> Invoicing and sales is actually free because for us, if you use only a few apps, it's free. So let's add CRM. You will have 10 users multiplied by $20. Exactly. [15:13] So it is multiplied. It's multiplied. [15:16] >> Just for the users. Yes. And then the apps is added. [15:18] Yeah. Yeah. Yeah. That's what I meant. Yeah. Yeah. I thought we might just be getting caught up there. Yeah. That's what I meant. Yeah. By the way, I love it. It's I mean, your pricing page is built around your pricing axes, which I mean, I assume allows you to just drive incredible expansion of 30%, which you already articulated. So congratulations on that. Any plans to raise capital today? No. Any plans to exit? [15:37] >> No. We we might have a secondary exit to help one of our investor to to go out, but we plan to we have too much money. We don't know what to do. Yeah. [15:46] So Why why would you do secondary though? Right? So like why not just pay yourself out operating dividends out of the 500 gain in [15:52] >> of It's cash flow from It's not for me. One of the VC, one of the front need to exit for his own reasons. [16:00] Would you buy them out as the company using your cash flow? [16:04] >> No, it's too much. [16:05] Oh, so you'd to raise a little bit. Yeah. Would you ever look at venture debt? [16:10] >> Yeah, but no, never. We had regular debt, but not venture debt. [16:15] What would you consider venture? A lot of companies like Wistia are using venture debt to buy out early investors. [16:20] >> Yeah. [16:22] >> That would be a lot. We are talking about hundreds of millions of dollars. [16:27] Oh, they're asking you to pay a big multiple on the 12,000,000 they put in, not just help them recover the cash. [16:33] >> Oh, maybe. I'm not yet don't to be think. [16:39] Yeah. Yeah. [16:39] >> No one's worried. [16:40] I basically just wanna understand. So, like they've put in 12,000,000 and what you're saying is you've talked to them, they want to get bought out, but they want get bought out at like a 10x multiple or like 100x multiple. [16:51] >> Yeah. [16:52] And you're saying to raise that cash would be a lot. [16:56] >> Yeah. I think the cash will be way too much for the company to buy it, whether we use debt or not. [17:01] Yeah. Okay. Very good, Fabian. Let's let's wrap up here with the famous five. Number one, what's your favorite business book? [17:10] >> Arowitz, the bad the [17:13] Hard thing about hard things. [17:14] >> Yeah. Hard thing about hard things. [17:15] Number two, is there a CEO you're following or studying? No. Number three, what billing tool do you guys use? Odoo. What's underlying? Like authorize.net or Stripe or what? [17:28] >> We have a mix according to the different according to the country. We use Stripe, we use Authorize and OGON, Ingenico. Spell it. Ingenico. [17:38] Ingenico. Oh, yeah. [17:39] >> Yeah. G e n c o. [17:42] Yeah. Number four. How many hours of sleep do get every night? [17:45] >> How many? Sleep? Seven. [17:47] Okay. It's good. What's Two. [17:49] >> And I'd like to do more. [17:50] What's your situation, Fabian? Married, single kids? [17:52] >> Married, two kids. [17:54] Married, two kiddos. And how old are you? [17:56] >> Five seven. No. You? Ah, 39. [17:59] 39. Last question. What do you wish your 20 year old self knew? [18:04] >> I don't know. [18:06] Guys, there you have it from Fabian. Started off as a services company back in 2005, then pivoted in 2010 into a SaaS company now serving 11,000 customers that paid about $203,100 bucks per month doing $2,600,000 per month or about $31,000,000 per year in terms of SaaS run rate. Another 9,000,000 on top of that in terms of professional services. They've done this by just raising $12,000,000 in capital, cash flow positive every month adding $500,000 in free cash [18:30] flow to their bank account, five eighty people based between Belgium, US, New York City and other remote locations 20% revenue churn per year that's gross 30% net expansion means he's got about 110% net revenue retention annually spending $2,400 to get a new customer so a twelve month payback period Fabian thank you so much for taking us to the top. [18:48] >> Thank you.