Software asset management — an area of enterprise IT designed, in part, to help businesses save money — continues to generate a lot of money itself. In the latest development, Xensam – a Stockholm startup that provides AI-powered tools to help businesses understand and track where and how software is used – has raised $40 million, its first outside funding since its founding eight years ago .
The funding comes from a single investor, Expedition Growth Capital of London. Oskar Fösker, CEO of ) and to break into the United States. walk.
The valuation was not disclosed, but Fösker said he and his brother remained majority shareholders. The company itself has 200 customers – some of the biggest names include Polestar and Volvo's Northvolt – and its annual recurring revenue is growing 126% annually, but it also doesn't disclose actual revenue figures.
The world of software access management, which others in the field sometimes call software spend management or license managementis very popular, especially because the problem to be solved is important and it is solved for multiple reasons.
Almost 900 billion dollars was spent globally by organizations on enterprise software in 2023, and some in the field have estimated that, thanks to the explosion of cloud computing and software sold as a service, a large organization can have hundreds, even thousands of different licenses under its roof.
This can have implications across disparate areas such as business spending, productivity and security for that organization. So it's no surprise that we've seen a rush of startups and big tech companies rushing to take on the challenge of trying to track and understand the bigger picture. what is used, where and why.
Xensam itself made its debut in this competitive battle. Both founders previously worked at another company called Snow Software, a big name in this field, which was moving quickly but which they said was losing pace when it came to cutting-edge developments, such as the use of software. AI to better monitor SaaS usage. .
“After a while, it was clear that a hole was about to open up in the market and no one had any intention of filling it,” Oskar said. “This hole was to become the first native SaaS player in the industry.” Side note on Snow that talks about potential valuations in this area: One of Snow's biggest competitors was a company called Flexera, and last year Flexera acquired Snow after it was reported that Snow was looking to sell himself for approximately $1 billion. Flexera, meanwhile, was last valued at nearly $3 billion in 2020. Other big deals in this space include IBM's purchase of Apptio for nearly $4.7 billion.
Xensam's approach is to use AI to comprehensively analyze and understand what's happening on an organization's network, providing a real-time picture of thousands of applications that may be used across environments. cloud and on-premises.
“We use AI for various parts of the technology,” Fösker said. “We use it to handle extreme amounts of data in the software standardization process,” which he describes as the process by which raw data is normalized into standardized applications filled with metadata. “That’s the main reason we were able to completely beat the competition.” It said it also uses upstream AI with a chatbot trained on its system and software licensing rules “can interact directly with the system and provide everything from system information to predefined reports based on a open specification”.
He doesn't go into detail about what exactly he plans to launch next, or where he believes there are still gaps in the market, but did say he plans to launch more products in the second quarter.
Their experience at Snow is also the reason the company started its business this far. “We do not believe that a financial structure based on series A, B, C, etc. to survive is a solid economic model. It relies on too many external factors,” he said. “We knew we had to be financially stable… to be sustainable. »
According to him, the decision to accept the venture capital money was because they had already figured out their own business model.
“We have seen many companies raise capital and lose their great company culture as the focus now turns to growth,” he said. “So it was very important for us to find an investor who also shared our cultural values, which we believe we have at Expedition. »
For its part, Expedition describes itself as typically the first outside investor in startups, meaning it works with many bootstrapped founders and therefore perhaps understands this model better than others.
“Xensam is one of the most impressive European growth companies we have encountered,” said Oliver Thomas, founder and managing partner of Expedition Growth Capital, in a statement. “Over their nearly eight years in business, they have built an essential solution that allows companies with thousands of employees to track, monitor and manage software usage. We are excited to work closely with the company as its first external investor and look forward to being part of its growth journey.