Software asset management, an enterprise IT department aimed at reducing costs for companies, continues to attract significant funding for itself. In the latest development, ZenthamA Stockholm startup with an AI-based tool that helps companies understand and track how and where their software is being used has raised $40 million. This is the startup’s first external funding since its founding eight years ago.
The funding will come from a single investor: London-based Expedition Growth Capital. Oskar Fösker, CEO of Xensam and who co-founded the company with his brother Gustav (CTO), said in an interview that he plans to continue developing the AI technology stack and hire more people (currently his number of employees is 100 people) to enter the US market.
The valuation was not disclosed, but Fosker said he and his brother remained major shareholders. The company itself has 200 customers, including major companies such as Volvo Polestar and Northvolt, and its annual recurring revenue is growing at 126% every year. The actual amount of revenue has not been disclosed.
The world of software access management. Others in the field may also refer to it as software expense management or software expense management. Software license management,This issue is crowded, especially since the problems to be addressed are large and important for multiple reasons.
almost $900 billion Organizations around the world will spend more on enterprise software in 2023, with the explosion of cloud computing and software sold as a service leading to large organizations spending hundreds or even thousands of dollars on enterprise software. Some officials have speculated that it could hold different licenses.
This can impact a variety of areas such as business spend, productivity, and security, so to address the challenge of tracking and understanding the complete picture of what is being used, many It’s not surprising to see startups and big tech companies developing products. , where and why.
In fact, Xensam started with that competition. The two brothers previously worked at another company called Snow Software, a giant in the software asset management space. In their opinion, while it was rapidly increasing in scale, it had lost pace when it came to cutting-edge developments, such as the ability to leverage AI to better track usage of his SaaS. It means.
“After a while, it was clear that there was a hole in the market, but no one was willing to fill it,” Oscar said. “This Hall was going to be the industry’s first native SaaS player.”
Here are some addendums to Snow that speak to potential recognition, attention, and consolidation in this area. One of Snow’s biggest competitors was a company called Flexera. last year, Flexera acquires Snow After it was reported that Snow was trying to sell himself, Approximately 1 billion dollars. Flexera, on the other hand, was last valued at nearly $3 billion in 2020 when it was acquired by Thoma Bravo (which the company still owns). Other big deals in this space include IBM’s acquisition of Apptio for about $4.7 billion.
Xensam’s approach uses AI to comprehensively scan and understand what’s happening across an organization’s network, potentially across thousands of applications in both cloud and on-premises environments. to understand the situation in real time.
“We use AI in different parts of our technology,” Fosker said. “We use this to process huge amounts of data in our software normalization process,” he explains. This refers to the process by which raw data is normalized into a standardized application with metadata. This is the core of why software usage management is important. Much of the information is siled into specific apps, making it difficult to know across the organization whether something is being used or not used at all. This may mean that a company is overpaying for some service, or in more alarming situations, it may introduce security vulnerabilities or operational glitches.
In other words, the way Xensam cuts through the mess and organizes it is what sets it apart. “This is the main reason why we were able to completely outperform our competitors,” he said, adding that they also leverage AI on the front end. Chatbots, trained on system and software license rules, “can interact directly with the system and provide everything from information from the system to pre-written reports based on open specifications.”
He declined to comment on what Xensam plans to launch next or what holes it still leaves in the market, but said the startup will launch more products in the second quarter. He said it was planned.
Meanwhile, the brothers’ experience at Snow is also the reason why the startup has been able to stay in business to this day.
“We do not believe that a financial structure based on Series A, B, C, etc. for survival is a sound business model. It is based on too many external factors,” he said. Ta. “We knew that in order to be sustainable, we had to be financially stable.”
So when they ended up getting VC funding, it was because they had already figured out the business model on their own, he said.
“We have seen many companies raise capital and lose their beautiful company culture while all the focus shifts to growth,” he said. “So it was very important to us to find investors who shared our cultural values, which we believe we have at Expedition as well.”
Expedition, on the other hand, describes itself as typically the first outside investor in startups. I mean, we work with a lot of bootstrapping founders, and we understand that model and how to approach that mindset as a VC probably more than any other company.
“Zentum is one of the most impressive European growth companies we have ever encountered,” Oliver Thomas, founder and managing partner of Expedition Growth Capital, said in a statement. Ta. “In nearly eight years of operation, we have built important solutions that enable companies with thousands of employees to track, monitor, and manage software usage. We are pleased to be working closely with the company as an external investor and look forward to being part of its growth journey.”