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Software asset management — an area of enterprise IT designed, in part, to help companies save money — continues to draw a lot of money itself. In the latest developments, Xensam — a startup out of Stockholm that provides AI-based tools to help businesses understand and track where and how software is being used — has raised $40 million, its first outside funding since being founded eight years ago.
The funding comes from Expedition Growth Capital, a London-based investor. Oskar Fösker, Xensam’s CEO who co-founded the company with his brother Gustav (the CTO), said it will be used to continue developing its AI technology stack, to hire more people (it’s now at 100 employees) and to break into the U.S. market.
The valuation is not being disclosed, but Fösker said he and his brother remain majority shareholders. The company itself has 200 customers — one of the bigger names including Volvo’s Polestar and Northvolt — and annual recurring revenues are growing at 126% annually, but it’s also not disclosing actual revenue numbers.
The software access management world, also known as software Cost managementThe following are some examples of how to use License management, is a crowded one, not least because the problem getting tackled is a big one, and it’s being tackled for multiple reasons.
Nearly $900 billionIn 2023, organizations will spend billions of dollars on enterprise software. Some experts estimate that a large organization could have hundreds, or even thousands, of licenses.
That can have implications across disparate areas like business spend, productivity and security for that organization, so it’s no surprise that we’ve seen a rush of startups and larger tech companies rushing to address the challenge of trying to track and understand the bigger picture of what is being used, where, and why.
Xensam was born out of this competitive environment. The two founders had previously worked for another company, Snow Software, a major player in the SaaS space. They felt that Snow Software was losing ground in terms of cutting-edge developments, like using AI to better track SaaS use.
“After a while it was clear that a hole was about to open up in the market, and no one showed any intentions to fill it,” Oskar said. “This hole was to be the first, native SaaS player in the business.” Sidenote to Snow that speaks to potential valuations in this space: one of Snow’s biggest competitors was a company called Flexera, and last year Flexera acquired SnowSnow has been reported to be looking to sell itself. Around $1 billion. Flexera was valued at Nearly $3 BillionIn 2020. IBM bought Apptio in this sector for $4.7 billion.
Xensam’s approach is to use AI to comprehensively scan and understand what is going on across an organization’s network, giving a real time picture of thousands of applications that might be in use across both cloud and on-premise environments.
“We’re using AI for various parts of the technology,” Fösker said. “We’re using it to handle extreme amounts of data in the software normalization process,”He describes this as the process of converting raw data into standardized applications, which are then populated with meta-data. “This is the key reason why we’ve been able to completely beat the competition.” He said that it’s also using AI in the front end with a chatbot trained on its system and software licensing rules “can interact directly with the system and provide everything from information from the system to prebuild reports based on an open specification.”
He doesn’t go into detail around what, exactly, it plans to launch next, or where it believes there remain holes in the market, but said that it plans to launch more products in Q2.
Snow’s experience is also the reason why the company has bootstrapped their business to date. “We don’t believe that a financial structure based on a Series A, B, C etc. for survival is a sound business model. It is based on too many external factors,”He said. “We knew we would have to be financially stable… to be sustainable.”
He said they were able to figure out their business model by themselves and that was why they decided to take VC funding.
“We’ve seen many companies raising money and losing a beautiful company culture while all focus is being changed to growth,”He said. “Therefore, it was very important for us to find an investor that also shared our cultural values, which we believe we have in Expedition.”
For its part, Expedition describes itself as typically the first outside investor in startups — meaning it works with a lot of bootstrapped founders so understands that model perhaps better than some others.
“Xensam is one of the most impressive European growth companies we’ve come across,”Oliver Thomas, the founder and managing partner of Expedition Growth Capital, made a statement. “In the nearly eight years they have been operating, they have built a critical solution which is enabling companies with thousands of employees to track, monitor and manage software usage. We’re delighted to be working closely with the company as their first external investor and look forward to being a part of their growth journey.”
Original content by Techcrunch.com – “After 8 years of being strapped for cash, Xensam now has $40M to spend on AI that manages the software assets”
Read the full article here https://techcrunch.com/2024/02/08/bootstrapped-for-8-years-xensam-has-now-snapped-up-40m-for-ai-that-manages-software-assets/ ‘