Software asset management — an area of enterprise IT designed, partially, to assist firms lower your expenses — continues to attract a whole lot of money itself. In the most recent development, Xensam — a startup out of Stockholm that gives AI-based tools to assist businesses understand and track where and the way software is getting used — has raised $40 million, its first outside funding since being founded eight years ago.
The funding is coming from a single investor, Expedition Growth Capital out of London. Oskar Fösker, Xensam’s CEO who co-founded the corporate together with his brother Gustav (the CTO), said it should be used to proceed developing its AI technology stack, to rent more people (it’s now at 100 employees) and to interrupt into the U.S. market.
The valuation isn’t being disclosed, but Fösker said he and his brother remain majority shareholders. The corporate itself has 200 customers — one in every of the larger names including Volvo’s Polestar and Northvolt — and annual recurring revenues are growing at 126% annually, however it’s also not disclosing actual revenue numbers.
The world of software access management, which others within the space sometimes call software expense management or license management, is a crowded one, not least because the issue getting tackled is an enormous one, and it’s being tackled for multiple reasons.
Nearly $900 billion was spent globally by organizations on enterprise software in 2023, and a few in the sector have estimated that, because of the explosion in cloud computing and software sold as a service, a bigger organization can have tons of and even hundreds of various licenses under its roof.
That may 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 bigger tech firms rushing to handle the challenge of attempting to track and understand the larger picture of what’s getting used, where, and why.
Xensam itself got its start out of that competitive fray. The 2 founders previously worked at one other company called Snow Software, an enormous name on this space, which was scaling fast but losing pace, of their opinion, when it got here to innovative developments, comparable to the usage of AI to raised track SaaS usage.
“After some time it was clear that a hole was about to open up out there, and nobody showed any intentions to fill it,” Oskar said. “This hole was to be the primary, native SaaS player within the business.” Sidenote to Snow that speaks to potential valuations on this space: one in every of Snow’s biggest competitors was an organization called Flexera, and last yr Flexera acquired Snow after it was reported that Snow was trying to sell itself for around $1 billion. Flexera meanwhile was last valued at nearly $3 billion in 2020. Other big deals on this area have included IBM buying Apptio for nearly $4.7 billion.
Xensam’s approach is to make use of AI to comprehensively scan and understand what is occurring across a corporation’s network, giving an actual time picture of hundreds of applications that is perhaps in use across each 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 knowledge within the software normalization process,” which he describes as the method where raw data gets normalized into standardized applications that’s populated with meta data. “That is the important thing reason why we’ve been in a position to completely beat the competition.” He said that it’s also using AI within the front end with a chatbot trained on its system and software licensing rules “can interact directly with the system and supply the whole lot 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 out there, but said that it plans to launch more products in Q2.
Their experience at Snow can also be why the corporate bootstrapped its business to this point. “We don’t consider that a financial structure based on a Series A, B, C etc. for survival is a sound business model. It relies on too many external aspects,” he said. “We knew we’d need to be financially stable… to be sustainable.”
The turn to eventually taking VC money, he said, was because they’d found out the business model on their very own already.
“We’ve seen many firms raising money and losing an attractive company culture while all focus is being modified to growth,” he said. “Due to this fact, it was very essential for us to search out an investor that also shared our cultural values, which we consider now we have in Expedition.”
For its part, Expedition describes itself as typically the primary outside investor in startups — meaning it really works with a whole lot of bootstrapped founders so understands that model perhaps higher than some others.
“Xensam is probably the most impressive European growth firms we’ve come across,” Oliver Thomas, founder and managing partner at Expedition Growth Capital, said in an announcement. “Within the nearly eight years they’ve been operating, they’ve built a critical solution which is enabling firms with hundreds of employees to trace, monitor and manage software usage. We’re delighted to be working closely with the corporate as their first external investor and look ahead to being a component of their growth journey.”
