How Odoo CEO Fabien Pinckaers grew to $552M revenue and 11K customers in 2025.

hello everybody my guest today is fabian pinkas he is the founder and ceo of a company called udu fabian are you ready to take us to the top yes all right open source business apps tell us more about what you guys are focused on at udu so we basically do a suite of business apps from crm website builder accounting manufacturing inventory those are individual business ads but if you install several they fully integrate to each other yeah we have a sas version as well as an on-premise version okay and if you break down your last 12 months revenue versus sas versus on-prem how much was sas uh it's more or less 50 50. oh 50-50 but i would say that even the on-premise our sas it's just hosted by someone else so both kind of both sass modern can you give me a general sense of scale today what are you doing per month we are in mrr we are 2.6 million per month or 65 per year okay sorry you cut out there so you're doing 2.6 million per month yes in mrr and and you and what were you doing exactly a year ago in december of 2017 uh in billing for the year will be around 44 million sorry what was your growth over the past 12 months growth is 64 okay 64 so you were doing about 1.5 million per month exactly a year ago something some something like that yeah and then and then grew that you said 64 yes that's great very good where did help us understand uh kind of more about where this growth is coming from how are you signing up customers um um we we do have two channels one is direct so on all platforms and we sell with the partners who offer the product on premise okay so what did you grow this morning what kickback are you paying partners is it a 20 30 50 commission uh it's ranged from 10 to 20. okay the smallest f10 and the largest have 20 percent 10 to 20 interesting okay and put all this on it before we get too much into the numbers here put this on a timeline for us when did you launch the company what year oh i launched the company 13 years ago when i went back from the university oh that's great so 2005. yes and i bootstrapped the company so it was very slow at the beginning i was alone second year i was alone then two people then four and eight so it took a lot of time how many people today 600 no 580. 580 and where's everybody based um 50 are in belgium 30 are in the u.s san francisco we also have an office in new york and the rest across asia and middle east okay very good so belgium u.s new york city and remote locations and are you still bootstrapped today or have you raised capital now we raised uh 10 million euros so 12 million okay 12 million bucks and and uh and why'd you decide to raise i mean it sounds like you've had a lot of success growing it basically i mean with little capital in the company when you decide was the right moment to raise so when we were 100 people we were doing 1 million in revenue per year we wanted to switch the business model because we started as a service company doing implementation service to uh our direct customer in belgium and then we had to 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 the service for us yep so it was quite risky and at that time so we raised four million dollar to do the pivot interesting and what year was that it was in 2010 2010 okay and so how many customers do you have today 11 000 okay 11 million would be a lot we actually have four millions of users because we do have a lot of free users because of the open source nature of do yeah so if i take if i take your 2.6 million 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 bucks a month is that right yes yes okay and and your current run rate i can take 2.6 million times 12 you're doing about 31 million an annual run rate right now now we do more because we have non-recurring revenues i see but just recurring 31 million yes yeah and the non-recurring what it what is that installation fees for the on-prem stuff yeah it's implementation service so import of the data training coaching customization interesting walk me through how you scale that how many people on your 580 person team are in charge of kind of the onboarding one-time revenue stuff um close to 120. 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 like have implementation fees on an account yes it changes a lot how much um the if they don't have a service we have a churn of 30 on the first year if they do if they do use the service we are closer to 15 20 depending on the size and blended together what's your annual revenue churn sorry blended blend all your customers together what's your annual revenue churn uh it's close to 20 okay and and what's decreasing a lot because we changed the business model of two years ago so most of the customers which one today are based on are the ones who purchased based on the old business model yeah okay so 20 revenue churn i assume that's gross annually do you have any expansion revenue yes it's 30 so the nation is around minus 10. got it yeah so 30 net expansion which means if i take 30 net expansion minus 20 churn you have 110 net revenue retention yes where's most the expansion coming from what are you up selling um two things more apps so they expand in the company so they would start with a crm and then they 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 one of the things that's remarkable to me 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 it's all in one yes if you need one application you have a lot of competition like on you as you said if you need task management you will have trello and that kind of things but if you need two or three apps there is nobody more you have to go to the erp like scp or microsoft dynamics who are very complex so as long as you need two or three apps uh it's much easier to use or do rather than trying to integrate different apps together yeah when you when you go out and and sign up a new 200 or 300 a month customer what's your fully weighted cac look like uh say that again what's the what's your fully weighted customer acquisition cost oh it's it depends if it's if it's direct or indirect okay if we sell directly it's 2000 euros or 2.5 2.4 thousand dollars if it's through a partner it's 1.2 okay now does that 1.2 include the kick back to the partner uh it's included yes it is the commission of the partner okay and what percent of your new sales are direct versus indirect uh it's 50 50. 50 50. okay so if we did get to a blended number it'd be something like one you know 1 800 us dollars for but even though you have two very distinct cohorts direct and indirect yeah so worst case 2400 bucks you're going direct your payback period there is what about 12 months to get your money back um yeah actually it's as we said per year most of our contracts we with the payback is quite it's instantly that's great yes i want to dive more into where you're spending that money when you do go direct but first i have to ask you you said you listened to the show right yes what why why do you listen and you know what you're getting into why'd you agree to come on i'm enjoying this by the way but i'm curious why you agreed to come on um i think i was curious curious about what you want to say is nathan a nice guy 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 i think well listen how do you feel you're doing um the question is for you actually i think you're doing i think you're doing great i think the audience is gonna love it you know it's my job a lot of people come on and kind of spout random stuff like we're the best or we're number one it's much more viable when someone like you comes on and shares numbers and then lessons on top of the numbers so let's continue doing that 2400 cac where do you spend that money typically what's the growth channel you use uh 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 okay and when you say new version you mean you're adding like a new app like invoicing or you're re working the whole architecture 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 percent just because of the new version interesting okay when you do like how much money are you spending per month today directly on like paid paid activities oh nothing uh search and search engine activities maybe 20k okay four months and some billboards and some other ads maybe 20k extra sorry what was the second one uh billboards on the on the street oh billboards billboards interesting um okay and do they i mean how do you track if the billboards work uh it's impossible to track it's just uh word of mouth we hear people talking about it and that's it fabian we saw you on the billboard like amazing we signed up yesterday we don't know but we don't spend that much we spend a few hundred k per year on that kind of thing so 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 grand a month in revenue that'd be a very large number but uh makes sense for where you're at in terms of scale are you guys profitable today or no yes we do half a million dollar cash flow positive every month 500k uh cash positive per month and what do you do with the 500 are just going to sit in your bank account or or how do you choose to reallocate yeah that's my biggest problem nowadays yeah it sits on the back bank account and it's i think it's an issue i want to recruit faster but we we we have difficulties recruiting faster good developers would you ever deploy that capital and go buy companies to add to your product suite 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 we will just spread the culture it wouldn't help we have a way to operate which is very different from traditional companies and i'm afraid that if we buy we will have complexity merging tell me about that how are you different than other companies in terms of how you're operating your culture uh um it's extremely rnd so everything is managed by developers no meetings extremely efficient it's difficult to explain it's not there is no manager it's mostly leaders and the people have more power than the manager usually okay it's just and so if someone comes with a title nobody will listen to him so of your 580 how many are engineers uh 50 50 okay so over kind of 270 280 are engineers and let's say like break down the team that builds out your crm app like like who's the leader and how many team members and how do they work together um we are not organized per app we have uh organized uh across all apps so if you take one app like a mailchimp to send email or a task management i would say 85 percent of what you have to do to build this app is generic like you need a mobile interface 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 mechanism to make your customer pay all those things are generic so the what is very specific to an app is like a crm it's probably five percent of the value is in this really in the series and the rest isn't saying yeah so our team are more transversal we do have people focus on some big apps like accounting i think i have 10 people maximum which is one of the biggest 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 check boxes of things i can check to add on my apps and then you have extra integrations like fedex dhl and easy post and ebay i mean is this page effective for you yes uh 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 play according to the number of users 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 users but if you and then you have a price per user yep and then you essentially it's a matrix and you multiply the two and that's how you get your price we assume the two not multiply you sum them both yes if i put 10 users in though right and i select your invoicing at 12 bucks a month and your sales at 12 bucks a month you're saying i mean it would take so 12 plus 12 is 24 times the 10 correct 10 users no it's not times it's plus i'm confused you're multiplying users times the total sum of all the percy i mean that's what your thing's doing right now i'm looking at my screen 10 users for two products each 12 bucks a month so it's 24 bucks a month for invoicing and sales for 10 users yeah you have 10 users plus 20 20 bucks i don't have the same numbers because the numbers depend on the countries so you're saying the total pricing would be 30 dollars a month uh let me check i will check in your country in union yeah i think this might be a language thing that you and i are getting tripped up on because you're you're pricing your pricing page is telling me 10 users times 24 is 240 then a user discount of 40 bucks so the total per month is 236. uh what what up did you choose invoicing and sales yeah i just want to get to the point of you're multiplying number of users times 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 multiply by 20 dollars exactly so it is multiplied it's multiplied just for the users yeah then the apps is added yeah yeah that's what i meant 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 drive incredible expansion of 30 which already articulated so congratulations on that um any plans to raise capital today no any plans to exit uh no we we might have a secondary exit to help one of our investors to go out but we plan to like we have too much money we don't know what to do yeah so why would you do a secondary though right so like why not just pay yourself out operating dividends out of the 500 gain in in kind of it's not for me one of the vc uh one of the front uh need to exit for its own reasons would you buy them out as the company using your cash flow uh no it's too much oh so you'd have to raise a little bit yeah would you ever look at venture debt uh yeah but no never we had regular debt but not venture debt what would you consider venture a lot of companies like wistia are using venture debt to buy out early investors yeah uh that would be a lot uh we are talking about hundreds of millions of dollars oh they're asking you to pay a big multiple on the 12 million they put in not just help them recover the cash oh maybe i'm not yet i don't to be thinking yeah yeah no one's for you i basically just want to understand so like they've put in 12 million and what you're saying is you've talked to them they want to be bought out but they want to get bought out at like a 10x multiple or like 100x multiple yeah and you're saying to raise that cash would be a lot yeah i think the cash will be way too much for the company to buy it whether we use debt or not yeah okay very good fabian let's uh let's wrap up here with the famous five number one what's your favorite business book um um oh it's the but the hard thing about hard things yeah i'll think about things number two is there a ceo you're following or studying no number three what billing tool do you guys use uh what's underlying like authorize.net or stripe or what uh we have a mix according to the different according to the country we use tribe we use authorized and uh organ in jedico spell it ingenico in jennifer yeah e nc yeah number four how many hours of sleep to get every night how many uh sleep uh seven okay it's good and what's your i'd like to do more what's your situation if you've been married single kids merely two kids married two kiddos and how old are you five seven no you ah 39 39 last question what do you wish your 20 year old self knew uh i don't know guys there you have it from fabian started off as a services company back in 2005 and pivoted in 2010 into a sas company now serving 11 000 customers that paid about 200 300 bucks per month doing 2.6 million bucks per month or about 31 million bucks per year in terms of sas run rate another 9 million on top of that in terms of professional services they've done this by just raising 12 million bucks in capital cash flow positive every month adding 500 000 bucks in free cash flow to their bank account 580 people based between belgium u.s new york city and other remote locations 20 revenue churn per year that's gross 30 net expansion means he's got a 110 net revenue retention annually spending 2 400 bucks to get a new customer so 12 month payback period fabian thank you so much for taking us to the top thank you