May 30, 2008
Spanish Open Source ERP Openbravo secures $12M
Web-based, open source Enterprise Resource Planning (ERP) and Point-of-Sale (PoS) solutions startup Openbravo, has received $12M in second round funding. The round was led by Amadeus Capital Partners, the European technology investor, and GIMV. The company boasts that this is the largest open-source ERP funding to date.
If you understand Spanish, here is a walk-through
The Pamplona, Spain-based startup sells its software to small and medium sized companies. Openbravo features a web-based interface, where the user can view the entire status of a company, including production information, inventory, customer information, order tracking, and workflow information
View - site
Posted at 06:26 AM | TrackBack | Permalink
June 15, 2007
New Twist On Open Source: The Bootstrapping Startup Behind Spreed.com
Today we profile struktur, the Stuttgart-based open source applications developer behind Spreed.com, an online service that caught our eye last year because of a fine user interface (Flash-based) to do online meeting and conferencing, including video and powerpoint, screensharing and even mind-mapping.
struktur has impressed since last summer because it is steadily developing new features for Spreed, it launched a financial planning application, which banks install on their customer-facing portals, and it sells icoya content managment software, which is the basis for a set of appliances it developed for e-billing that it claims makes invoice printing a lot cheaper for business and government orgs. (image of one the boxes right).
And it did all that with 20 employees.
struktur is an Open Source company, but not in the sense of a MySQL or a RedHat. struktur uses open software to create its business applications, which is apparently a very cost-efficient way to go.
If we compare Spreed with Sequoia-backed Unisfair, both are web-based conferencing and events applications: Unisfair has raised several millions in VC. Spreed.com has raised zero dollars in venture capital. 
Little buzz, but big customers.
Read on to hear co-founder Niels Mache talk about why he's not raising venture capital, on what's overhyped in Europe, and how his company makes open source profitable in the business with just 20 employees.
You host some of your software applications, like spreed.com, but you also sell software licenses?
Our core business is not software, nor technology. It is selling business applications to industries, i.e. banks, insurances, government and the manufacturing industry. We license business applications. Our licenses guarantee that the application, spreed for instance, is reliably available with
- a defined set of features,
- for a given number of users and
- during the contracted period of time.
Developing solutions for upcoming businesses in the future, understanding the customer need is what we essentially do. Except for spreed, services are not struktur's core business.
Basically your team develops code for certain OS communities in exchange for using it in your products, right?
We directly support and are part of a few OS projects. For example, Zope, Plone, Red5, icoya, WordXML, OSNelly -- the Nelly Moser ASAO open source project. We directly finance OS developers for development projects and we develop and release code for OS projects. Indeed, our product development takes advantage from shared OS development.
This helps us to improve quality and to lower development time and costs. Open Source is our most important instrument that helps us to have products ready for the market before others do and to work with cutting edge technology being able to deliver unique products.
In many installations the customers receive the complete source and therefore would be able to deploy the application on their own. But most customers don't deploy our software on their own. But they don't because it is simply too expensive [for them].
How many employees do you have now and how much do you spend on R&D?
struktur is a small company. 20 people are working for struktur. In 2001 the R&D budget was 250,000 EUR. In 2006 we invested in R&D 480,000 EUR. For 2007 the goal is to spend 850,000 EUR on R&D.
You have never raised outside capital from venture capital firms or biz angels?
Right. We have not raised venture capital. We started in 2001 with private capital of €1M [that is not a typo -it's one million].
What are your goals with Struktur? Do you plan to go public someday?
We had a few enquiries this year to get capital for raising our business to eventually go on the stock market. However this is not our goal, at least not in Germany.
Why?
German capital in the IT-sector is pretty stupid money. For most IT companies, capital from German venture capitalists does not really help to grow an IT business. Our strategy is to spin-off operations. spreed.com is one example. One of our product lines will also take a role in an IPO next year.
Can you elaborate on that statement about venture capital and IT sector in Germany?
I personally cannot think of a larger and successful venture-backed German IT company in the past 10 years.
There are many successful start-ups in other sectors: physics, Laser technology, medical, pharma, automotive and construction. Germany is a good market for start-ups in the consumer market. Examples include Car advertiser mobile.de, photo sales platform fotolia, Jamba mobile ring-tones, OpenBC/XING and social platforms (students, dating, etc.) are successful in Germany.
My impression is that the German venture capital investors focus on rather simple business models where no real technology is involved.
VC’s in Germany have mainly invested in businesses where the revenue scales directly with the investment in marketing, sales and eventually, production.
Venture capital over here is rarely invested for the development or deployment of a technology. Most investments solely focus on the growth of a revenue-proved product and market. Thus a typical German VC investment in not a venture finance, it is growth finance.
The revenue/customer - investment loop is also typically driven by a short term view: an investment today must result in an increase of revenue or number of customers within a narrow time frame of 3 to 12 months.
What is the most overhyped tech trend in Europe right now?
Europe generally and Germany in particular overhypes older technologies and underhypes the really new ones because Europe tend to adopt new technologies slower than the US and Asia.
Nanotechnology [for exampl] is decades old. It is not well suited to create much employment because most of the outcome of Nanotechnology will be pretty simple and straight-forward applications such as fluids, colors, windscreens for the automotive industry. Mass production of nano-products will be in Asia or the US.
The solar cell sector is also overhyped in Germany because of an artificial pricing for solar and wind energy. Solar energy is overhyped in Germany because of a legislation “Regenerative Energy Law” that force energy producers to pay high prices for electricity generated by solar panels.
The effect of the law is that the solar energy sector receives hundreds of millions of Euros subventions from consumers who pay for increased electricity prices. The unwanted side effect is that many solar companies can only survive on a subsidised market.
Finally, Second Life is massively overhyped (but this is a lot of fun for the media).
- End of interview extract.
Mache also told us about how he recruits for his startup, which we wrote about in How to Hire For Your Bootstrapped Venture.
Posted at 04:38 AM | TrackBack | Permalink
June 14, 2007
Paris' Open Source Data Integration Startup Talend Funded For US Thrust
Our intrepid a:c euro reporter mobile blogs from Paris where she heard from investment advisor Marc Brandsma of Chausson Finance who lets us know that opens source data integration play Talend has closed on its second round at $3.5M.
Say Brandsma of Talend:
"I love working with this company: the founders are energizing, the team is young and fantastic, and they are doing something really hard that is to establish themselves as a market leader in the USA. They have an incredible traction with lots of high level partnerships and an astonishing community and customer response. I bet that this company will enter the exclusive club of European start-ups enjoying a global success through an acceleration on the USA market."
Investors in Talend include AGF Private Equity and Galileo Partners. In the US, there is a well funded open source data integration company called MuleSource. This is a complex field, we understand, and the two may not but heads initially.
Update: The difference is that MuleSource is an application integration company ( SOA) and Talend is a Data Integration solution. ETL is the three letter acronym here. Extract Transform Load. Such software can take large amounts of data from a legacy database for example and make it available in formats that newer applications can exploit.
View - site
Posted at 06:59 AM | TrackBack | Permalink
June 11, 2007
IRIS Software and CSG Bought Out For £500M
Hellman & Friedman is buying UK software companies IRIS Software and Computer Software Group from HgCapital, for£500M. IRIS sells accounting software. CSG provides software to the legal market. The group has combined revenues of £100M and will operate under the Iris Software Group brand.
Update: Max Bleyleben takes this deal under the microscope in his blog. Worth a read if you're wondering how private equity manages tech investments.
View Iris site and CSG site
Posted at 05:22 PM | TrackBack | Permalink
January 11, 2007
Thingamy Founder On Bloatware Versus Enterprise 2.0
While our Windows PC was loading our Word application this morning, a lengthy process, we had time to read Sigurd Rinde’s blog. He’s the entrepreneur behind Thingamy, an application development tool for business aplications. Based on recent blog posts, it looks like VCs are courting him, seeing Thingamy as an example of Enterprise 2.0, no doubt.
Call it what you will, we like his viewpoint on the computing giants of this world... Here’s an example:
... Microsoft is coming out with a software update to make the Zune compatible with Vista. Good for them. The patch is 22 Mb. Thingamy is 14 Mb. With Zune you can play some music, with thingamy you can run Microsoft. Are they paid by line-of-code in Seattle?
Read - software - big and small
Posted at 06:41 AM | TrackBack | Permalink
June 13, 2006
Employee Monitoring In a Box
In what 3i is calling a home-grown solution, it is, along with Scottish Equity Partners and SGAM Alternative Investments, investing in a £3M Series A round for Chronicle Solutions.
The five year old startup makes a server-grade appliance, which captures and indexes all types of user activities in a network in real time, including email, Instant Messanger, WebMail, Blogs and VOIP calls.
Looks innocent, watches and records everything you do
Read - 3i backs Chronicle with £3m financing and CEO (3i press release)
Posted at 05:32 PM | TrackBack | Permalink
May 15, 2006
Prague Startup And Really Simple Support For eMailrooms
From time to time we do an early stage company profile and this week, Sproutit, based in Prague is getting the treatment. We interviewed Charles Jolley, one of the three American founders of Sproutit (pictured here, Jolley far left), a software company that offers a web-based email support application, called Mailroom.
The business model is on-demand software, that is, users subscribe to the service on a month by month basis. Rates are based on volume rather than on seats/number of users.
Mailroom targets the small and medium sized business market. Sproutit’s marketing man says the software takes the “pain out of success”. The pitch is that when a company suddenly gets deluged with emails sent to their contact@, support@, info@ addresses, they can be handled faster with Mailroom.
It is different than standard email in a couple of ways. It exploits RSS (the same technology used to distribute the contents of blogs, online news, and search results), which makes it particularly suitable for teams and sharing the email response jobs. As it gives users the ability to "see" (in an RSS reader) and respond to email sent to other members of the team.
It uses “tags” instead of folders for categorizing and archiving (rather than directories, folders, and subdirectories). Being able to apply more than one tag raises the visibility of email correspondence.
A little bit of AI in the mix automates the reuse of past responses to email queries or requests, says the firm. The apps saves every reply sent and "learns" which replies are more commonly used with each email.
Customers include Chicago-based 37Signals, which uses it to handle their software support emails, Texas-based Blinksale, and JadedPixel, the Canadian company behind Shopify.
These customers, all startups themselves, are early adopters and validate to a degree, Sproutit’s product, but to grow the business as big as they want to, Jolley’s team will face the challenge of penetrating the small and medium sized business software market.
It's one of the toughest markets to penetrate, not as difficult as the carrier market, but for a startup, targeting a huge, highly fragmented market is, to say the least, a challenge.
But Jolley eyes what Intuit has done with its QuickBooks software as proof that it can be done.
The plan is to develop other business-oriented applications with the goal of publishing a suite of tools. As for financing, Jolley said the team aims to raise a typical Series A sized round to pay for marketing and sales and new product development. The founding team is moving back to the States in July, he said.
Posted at 07:03 AM | TrackBack | Permalink
April 09, 2006
SAP Co-founder Backs B2B Service Provider
Five year old, Indatex SCI, a German hosted integration service provider, just got itself some smart money by selling a 28 percent stake to DAH Beteiligungsgesellschaft, an investment vehicle that belongs to Dietmar Hopp, an SAP co-founder. Hopp will join its board.
The amount was not disclosed but the business process and EDI automation firm said in a statement that it was a “double digit million euro” sum.
No hype at Idatex. It doesn't claim to have a paperless solution, rather a "paperlean" one.
Indatex, which has about 180 customers in the automotive and manufacturing sectors, will use the capital to expand internationally. It claims its platform enables money-saving in the areas of EDI (standardized data exchange with suppliers) business process and communications integration because the entire chain is automated.
Supporting that claim besides all the quotes on its website from satisfied customers, is that it has been identified by Gartner Group has Indatex in one of its “magic quadrants” reports, the one on hosted integration service provders.
This looks like a smart money deal for Indatex as DAH Beteiligungsgesellschaft, is the investment vehicle of Dietmar Hopp (pictured above), an SAP co-founder. Hopp is joining its board.
It took the SAP founder longer than it takes your average Silicon Valley entrepreneur to begin venture capital investing, but Hopp and family are certainly active now. In recent months, DAH took a minority stake in Equinet, a small and mid cap oriented investment bank, acquired a stake in a financial data provider unit of VWD, as well as making several biotech investments.
Hopp is one on the Forbes list of the super rich, coming in at number 61.
Read - Familie Hopp: Neuer Investor bei indatex (press releaes)
Posted at 04:55 PM | TrackBack | Permalink
April 05, 2006
VC-backed SteelTrace Acquired By Compuware
Irish startup, SteelTrace has been acquired by Compuware for $20M (€16.3M), giving the firm's investors and founders an exit. Founded in 2001, Steeltrace delivers software used by companies to coordinate and collaborate on application development projects.
The a:c euro checked on the firm's financing history (publicly available source) and it looks to have raised a total of about €3.3M since founding. Its backers are Trinity Ventures and Netdecision.
Read - Compuware acquires (Press Release)
Posted at 06:17 AM | TrackBack | Permalink
March 30, 2006
Startup addresses vagaries of publishing docs on mobiles
We heard about a Finnish startup, Max Rumpus, this week from its Swiss seed round backer. It is the company behind Maxdox a software application used to publish documents on mobilephones. It looks like a product for an unmet need in the wireless market.
HP uses MaxDox to produce pint-sized documents for the mobilephone platform.
MaxDox screenshot with its functionality featured (Click image to enlarge)
It's offering a consumer and a business version of the application. The consumer, or personal version, is free to download.
Max Rumpus was founded in 2001, by Stephen Lee, who now heads up marketing, and Mika Huhtamäki, currently the firm's CTO, both of whom previously had gigs at Wapit! The firm's CEO, Tero Kalsta, worked for Jippii, a mobile content developer, whose European business was acquired by the UK's iTouch in 2004 for up to €30M.
The Leningrad Cowboys' hairdos are as pointy as their shoes
Wapit! you may recall was one of the stars of the hype that surrounded the launch of the Wireless Application Protocol (aka WAP). It was VC-backed and got a lot of press attention -- mainly because its flamboyant PR exec, Mato Valtonen, was a member of the gimmicky Leningrad Cowboys -- but because WAP was crap (for mobile Internet access), its business ultimately flopped.
Max Rumpus has financed software development, its first product was a mobile messaging alert program, targeted at businesses, by providing consulting services. It then launched in 2003 the first version of Maxdox, and brought in seed investors.
In January it raised an undisclosed amount in a first round of venture capital, led by Innofinance, a Finnish VC, after being backed by seed investors prior to that. Today it is focused purely on developing the Maxdox Mobile Publisher software business.
If things go right for this startup, it could do for the mobilephone what Adobe and its free readers do for PDF documents on the desktop. If that doesn't happen then it has a chance to develop a smaller sized business making its software availalbe to brand marketing agencies as part of a set of tools that would enable publishing to the mobilephone platform.
Read - Innofinance assists Max Rumpus to strengthen its sales
Posted at 07:19 AM | TrackBack | Permalink
March 27, 2006
BMC Buys Venture-backed Identify for $150M
BMC Software Inc has agreed to buy Israel's Identify Software Ltd., for about $150 million, reported Reuters today, explaining that the acquisition of Tel Aviv-based Identify, which has about 500 customers, would further extend BMC's presence in transaction management.
Some details on Identify and its backers were provided by Ynet News.
Identify, which develops systems for monitoring and resolving problems in software applications, raised about USD 63 million during its 10 years of existence. The major stock owners of the firm are venture capital funds Star and Evergreen.
Other investors according to the firms website include UBS, Intel Capital, Earlybird Ventures, and other local funds.
Read Software giant BMC buys Israeli start-up (Ynetnews)
Read - BMC acquisition (Reuters)
Posted at 04:31 PM | TrackBack | Permalink
March 24, 2006
Dotcom biz model with no name gets one
Fred Wilson in his VC blog described a few days ago his favourite business model. At the time, it was without a name. It's the sales stragegy that involves giving away free access to a service, or software, and then offering a more advanced version for a subscription fee.
Examples of online companies successfully managed this model include Skype for IP Telephony, Box.Net for storage, and Flickr, for photo storage. And examples of software companies, include firms like MySQL and shareware vendors.
At the end of the post he asked readers for suggestions of what to call the business model and he was provided with plenty. So far Freemium seems to be the one he's chosen.
There is no denying that Freemium is a trend right now, so we will keep you posted if a) the term catches on; and b) startups beyond this handful can repeat it.
And c) more importantly if any of them emerge as corporations in their own right, that is, they don't get acquired before they've become profitable and proven than this is a great business model over the long run.
The alarm:clock euro would also like to note that there are software companies at the other end of the spectrum that not only charge right off the bat for their software, but even charge for a demo.
You'll find pictures of the packaging and data flow diagrams but you won't find a decent screenshot at trend-bucking Kalido.
OK, it is only one example of a company that does both, but we're now looking more actively for other examples.
The startup in question is Kalido, a Benchmark Capital Europe portfolio company. An entry-cost license is $350,000; maintenance is $60,000 annually. That is a trend-bucking sales strategy if ever there was one.
We recently heard one of the top execs at Kalido speak on a tech venture panel. The firm spun out of Shell and has about ten years of R&D behind it. The spinout took a lot longer to pull off than the developer team hoped but now that it's independent, business is booming and expansion into the US market was the current challenge facing management.
Read - Kalido Interview (Daily Telegraph)
Read - My Favorite Business Model (Fred Wilson blog)
Read - The Freemium Business Model (Fred Wilson blog)
Posted at 08:42 AM | TrackBack | Permalink
March 16, 2006
Swiss software biz SAF prepares for IPO
Swisss software company, SAF AG, announced today its intention to float on the Prime Standard stock exchange in Frankfurt within the next few months. The 10 year old firm is specialized in logistics and supply chain software and services.
CEO Andreas von Beringe, along with co-founder Gerhard Arminger, own 60 percent of SAF AG
SAF employs 50 and has annual sales of €7.4M. Net profit was €2M in 2005. The IPO is meant to finance US expansion and development of new market segments in auto and consumer goods sectors, as well as service sectors (banking and finance). It is mainly focused on the import/export sector today.
About 60 percent of SAF is owned by founders Andreas von Beringe and Gerhard Arminger. Top managers and employees own a small stake, and 40 percent of the shares are owned by German and Swiss venture firms, including Ventizz Capital, Techinvest Beteiligungsgesellschaft, PAARL Ventures GmbH and New Value AG. BNP Paribas is the lead bank on the floatation.
Read- Schweizer Software-Unternehmen SAF plant Börsengang
Posted at 12:32 PM | TrackBack | Permalink
March 09, 2006
Shopper simulation software pulls SAP and VC
A capital injection of €3M from SAP Ventures and Target Partners will enable Dacos to take its consumer goods and retail simulation software to the market more quickly. The company, founded in 2001 has been developing its simulation engine over the past four years with the German research center for artificial intelligence (DFKI) in Saarbrücken, from which it spun out. The core tech can be used for other applications, says the firm.
The company says its system is fed "anonomyzed" credit card, loyalty card, and sales data and combines it with psychological models, marketing models, and external data (like the weather or the economy) to predict behavior, analyzing buying habits, and plan.
If the software works, it is the kind of product that consulting companies like to resell because the users typically have to be taught how to feed and care for the system, as well as how to understand the output.
Posted at 01:56 PM | TrackBack | Permalink
February 28, 2006
MySQL Buys Out Netfrastructure
MySQL's CEO recently let it be know that he had spurned a buy-out offer from Oracle, proclaiming that MySQL was destined to be a very large company without being bought. Today the company bought Manchester, MA-based Netfrastructure, which sells server software for Web applications.
As part of the deal, MySQL brings aboard database pioneer Jim Starkey. Starkey created InterBase, a database that became part of Borland International.
Read - MySQL Has Bought Netfrastructure (ChannelWeb
Posted at 05:29 PM | TrackBack | Permalink
February 16, 2006
MySQL finds Oracle resistible
Over at sister site, the alarm:clock, a post reports MySQL, a vendor of database software, rejected an offer from its much larger rival, Oracle.
There's a good quote from Marten Mickos, CEO of MySQL that reveals his conviction or bravado, depending on your opinion of his open source hybrid operation: "We will be part of a larger company, but it will be called MySQL."
The firm is already pretty big, with more than 200 employees and it is growing. MySQL does not disclose sales but industry insiders say it that generated about $40M in sales last year targeting the enterpise market. The same sources say its sales growth is at a double-digit rate.
For a European software company, it has raised a signficant amount of capital, some $39M including its latest injection announced this week. And it just might be its last if the press release is anything to go by.
In the past, the quotable Mickos has told reporters that he is as "greedy as anyone else" when it comes to making money with software developed and distributed on an open source model (MySQL actually has a dual license model). And he makes no secret that the way he wants to satisfy that greed via the promotion of an open-source "stack" of innovative and competing software applications that will rival "closed" web and enterprise software, the kind that tends to lock in buyers. (The stack he refers to is the LAMPS stack which includes Linux, Apache, MySQL, PHP / Perl / Python.)
It sounds like Mickos is aiming to remain independent. The firm could go public, that is if the NASDAQ ever recovers a healthy appetite for growth stocks.
Read MySQL slaps Oracle's buyout offer
Read Oracle tried to buy MySQL (CNET News)
Read MySQL secures VC (Newsforge)
Posted at 03:58 PM | TrackBack | Permalink
February 02, 2006
Jerome Mol is back with modest Blackberry software firm
A Dutch company that make software for the Blackberry to print emails, view PDF files, and the like, caught our attention this week, not so much because of its products, but because the co-founder and CEO’s name, Jerome Mol, rang a bell.
Mol rose to fame and fortune when he sold Prolin Software, a company he founded, to HP for $50M in 1997. As the bubble started to inflate here, he created a startup incubator in Amsterdam called GorillaPark, and a publishing company, Tornado Insider (your reporter was a stringer for its monthly magazine), efforts that received lots of media attention.
At the time it seemed like the old rules of what it takes to build a company, time, experienced management, customers, capital efficiency, and sales had changed. But as we all learned, the basics of creating a valuable venture do not change. (Are Web 2.0 startup entrepreneurs listening?)
Both efforts failed to cover their costs and fell into bankruptcy proceedings. Today, Tornado Insider is still going, but much reduced, selling access to a deal database and a weekly newsletter. GorillaPark was acquired by its management from Mol in 2004.
Mol seems to be onto something a bit more viable this time.
GPXS claims 200 percent sales growth over the last two years. The closest we could pin management down to an actual sales figure was a statement that it's expecting to turnover between €5M and €10M this year. GPXS recently acquired a smaller Blackberry software developer, Galty Technologies, and now employs 60. It has raised outside capital, but there is no disclosure on the amount.
Making software add-ons for another company’s platform is not as sexy as building something entirely new. But it makes sense for GPXS, which sells mobile office applications, a market segment that many have tried and failed to penetrate, mainly due to the slower than expected uptake of high-end smartphones.
Targeting the Blackberry user, as opposed to cellphone users in general, is one way to make sure there is an installed base that wants business-oriented applications via wireless networks.
GPXS sounds to be pragmatic and its products practical, but not as practical as the “ultimate” Blackberry accessory, the Blackberry Helmet (See video clip of Canada’s Rick Mercer demo-ing the device.)
Read - GorillaPark goes titsup
Read - Time's Mol profile circa 2000
