Investors Pump $12 Million Into Open Source ERP, Point of Sale Software

Openbravo, maker of open source ERP (enterprise resource planning) and POS (point of sale) platforms, has landed $12 million in new funding. Openbravo’s new funding reinforces growing interest in open, easily customized alternatives to entrenched giants like Oracle and SAP. The VAR Guy traded email with Manel Sarasa, CEO of Openbravo, for his thoughts on the funding. Here’s a look at the email exchange.

First, some background. Based in Spain, Openbravo specializes in ERP and POS, and has been pushing into the US market. The VAR Guy has been intrigued with Openbravo for about a year, and this $12 million in funding provided the perfect excuse to catch up with CEO Manel Sarasa over email.

The VAR Guy: What does the funding signify and how will Openbravo use the money?

Sarasa: It is about consolidating our leadership position in the open source ERP and POS spaces. We are thrilled with the growth in all dimensions that our company has experienced since we raised our first round and published our code in April 2006 (e.g. more than 1,500 downloads a day of our ERP – this more than triples the number of downloads of other open source ERP projects, which adds up to more than 500,000 total downloads, 40 localization projects, 80 partners with presence in 40 countries, several hundreds of active deployments…) and we are especially excited with acquiring this group of high caliber international investors.

These investors are extremely aligned with our vision of the opportunity since: the opportunity is global and they reinforce our global positioning (Amadeus Capital is UK based; GIMV is the leading Benelux investment firm and Adara is based in Madrid), the opportunity requires the best people at all levels (both Andrey Kessel, a Russian national from Amadeus, and Steven Coppens, a Belgium national, have great ERP experience from the past and have joined our Board) and they are fully committed to the principles we outlined to build the leading open source business solution company in the space.

The VAR Guy: How your move into the US/North American market going? Can you give any specific examples of progress?

Sarasa: One of the nicest things of open source products is that they are global by definition, and this includes the US.

However, the US is a key market for us since it is #1 in terms of size with still a lot of room for development in the midmarket segment and it is definitively a place where Openbravo will hit hard. Also the US is a large concentration of leading software vendors thus allowing for numerous interesting deals that could be beneficial to our community and business overall. Impressively, the US is one of the countries from where we receive the largest number of leads.

We have already organized numerous events in the US in the past, and in the next weeks, we are organizing our Training Convention and first free community Get Together in Miami. We want to increase our number of partners in the US. Partners who join now, can benefit from this large demand that we currently have.

The VAR Guy: You acquired POS software last year. How has the acquisition gone? Can you offer some examples of customer wins or progress you’ve made with open source POS in recent months?

Sarasa: Very well. Openbravo POS remains the leading open source POS in the space, it is being download over 250 times every day and the feedback we are getting from community, partners and end client leads worldwide is really impressive.

From a business perspective, we are now building the go-to market for the product, which I cannot disclose at the moment for confidentiality reasons, but we are receiving very interesting leads both from mid-size retail chains whose requirements are more than an out-of-box solution can provide and hardware manufacturers who want to explore the possibility to bundle Openbravo POS.

The VAR Guy: What key open source partnerships do you have in place? Are you working with Red Hat, Novell, MySQL, others?

Sarasa: From the very first day I joined the company, we were very keen on establishing relationships with other leading companies that could provide synergies to our businesses.

This is the reason why we co-founded the Open Solutions Alliance, which is a nonprofit, vendor-neutral consortium dedicated to driving the adoption of open source business solutions and to fostering integration among them.

Additionally, we have established key technology partnerships in order to enhance the provision and deployment of Openbravo ERP. Most important ones being:

• rPath which empowers our ERP Network Edition and could be summarized as a the first ERP in a box offering plus a subscription contract for our end user (see http://www.openbravo.com/product/get-openbravo/).
• BitRock which empowers our Community Edition installers.
• JasperSoft, since its JasperReport product comes embedded with our ERP
• Dojo toolkit which empowers a richer user experience through AJAX

At the moment, we have not closed any agreement with Red Hat, Novell or MySQL.

The VAR Guy: What are your top company priorities for the next 3 to 6 months?

Sarasa: Recruit best-in-class professionals in all areas. Today at Openbravo we are more than 70 excellent professionals representing more than 15 nationalities and we need to grow the team, acquiring people in all areas. We will continue looking for the best candidates no matter where they are. To get a flavor of the positions being recruited you can go to http://www.openbravo.com/about-us/human-resources/job-offers/.

[Also…]

• Continue to successfully manage our strong growth. This is especially important in the Partner recruiting front since today demand around Openbravo products is larger than the capacity all our Partners have to deliver it enabling a huge opportunity for all. Also, we are planning to open select international offices.
• Continue leading the development of the best products and community. We have a very exciting roadmap which will bring an unparalleled level of excitement to our community, which we feel will have never been seen in the business solutions world before.

The VAR Guy: Can you describe the typical company size (small, midsize or large?) that deploys your ERP and POS solutions?

Sarasa: As a summary, I would say midsize to large companies with one or a combination of the following characteristics: a relatively high number of named users, multi-site with international trade or even presence, distributed users due to Openbravo’s web interface (mobile sales people, working out of the office, etc.), with requirements beyond accounting and commercial (orders, invoices and payments management) and some of them with specific requirements which are not well covered with traditional proprietary packages. For examples of companies that deploy our ERP you can check http://www.openbravo.com/customers/success-stories/.

Closing thoughts from The VAR Guy: Forgive our resident blogger for running Sarasa’s thoughts in their entirety. Admittedly, some of his points are sprinkled with marketing hype. But in this case, The VAR Guy wanted to introduce a CEO from an emerging open source company to many readers. And Openbravo was among the 10 open source companies The VAR Guy told readers to watch in 2008.

Overall, it sounds like Openbravo is making progress. But it’s surprising that Openbravo doesn’t have key relationships in place with Red Hat, Novell, MySQL and other big open source companies.

A few weeks ago, during a discussion about Novell’s embedded software for retail customers, Novell insiders told The VAR Guy they had never heard of Openbravo. That’s certainly surprising.

Hopefully, Openbravo will use some of its $12 million in funding for marketing. The ERP world can certainly benefit from open source …