Bootstrapped for 8 years, Zensum has now raised $40M for AI that manages software assets

Software asset management – ​​an area of ​​enterprise IT partly designed to help companies save money – continues to attract lots of money itself. In the latest development, Zensum – a Stockholm startup that provides AI-based tools to help businesses understand and track where and how software is being used – has raised $40 million, which This is its first external funding since it was founded eight years ago.

The funding is coming from Expedition Growth Capital, a London-based investor. Zensum CEO Oscar Fosker, who co-founded the company with his brother Gustav (CTO), said it will be used to grow its AI technology stack, hire more people (it now has 100 employees) and expand to the US. Will be done to enter. market.

The valuation is not being disclosed, but Fosker said he and his brother will remain majority shareholders. The company itself has 200 customers – including Volvo’s Polestar and Northvolt among the big names – and annual recurring revenue is growing at a rate of 126% year over year, but it’s not even disclosing actual revenue numbers.

The world of software access management, which others in the field sometimes call software expense management or license management, is a crowded world, and not just because the problem of dealing with it is a big one, and it needs to be dealt with for a number of reasons. Used to be.

Nearly $900 billion was spent globally by organizations on enterprise software in 2023, and some in the field have estimated that, due to the explosion in cloud computing and software sold as a service, a large organization will have There may be hundreds or even thousands of different licenses. Its roof.

This can have an impact on areas as diverse as business spend, productivity, and security for that organization, so it’s no surprise that we’ve worked with startups and big tech to address the challenge of tracking and understanding the bigger picture. Have seen crowd of companies. What is being used, where and why.

Zensum started from that competitive field. Both founders previously worked at another company called Snow Software, which was a big name in the field, growing rapidly, but losing momentum, in their opinion, when it came to cutting-edge developments, such as SaaS. Use of AI to better track usage. ,

“After a while it became clear that there was a hole opening up in the market and no one showed any intention of filling it,” Oscar said. “The hole was to be the first, native SaaS player in the business.” Sidenote to Snow that points out the potential valuation in this area: One of Snow’s biggest competitors was a company called Flexera, and last year Flexera acquired Snow after it was reported that Snow was selling itself for about $1. Wanted to sell for billions of dollars. Flexera, meanwhile, was last valued at around $3 billion in 2020. Other big deals in the sector include IBM buying Apptio for about $4.7 billion.

Zensum’s approach is to use AI to comprehensively scan and understand what is running on an organization’s network, providing a real-time picture of the thousands of applications in use in both cloud and on-premises environments. Can.

“We’re using AI for different pieces of technology,” Fosker said. “We are using it in the software normalization process to handle enormous amounts of data,” he describes as the process where raw data is normalized into standardized applications that are filled with meta data. “This is the main reason why we have been able to completely defeat the competition.” He said it’s also using AI on the front end, with chatbots trained on its systems and software licensing rules that can “interact directly with the system and get everything from information from the system to prebuilt reports based on open specifications.” can provide.”

He didn’t go into detail about what, exactly, he plans to launch next, or whether he believes there are shortcomings in the market, but he did say he plans to launch more products in Q2. Is planning.

It is because of his experience at Snow that the company has grown its business so far. “We do not believe that a financial structure based on Series A, B, C etc. is a good business model for survival. It’s based on a lot of external factors,” he said. “We knew that to be sustainable we had to be financially stable…”

Ultimately, he said, the opportunity to get money from VCs came because he had already figured out the business model.

“We’ve seen a lot of companies raising money and losing a beautiful company culture while all the focus is on growth,” he said. “Therefore, it was very important for us to find an investor that also shares the cultural values ​​that we believe we have in the campaign.”

For its part, Expedition describes itself as typically the first outside investor in startups — meaning it works with a lot of bootstrapped founders, so probably understands that model better than some others.

“Zensome is one of the most impressive European growth companies,” Oliver Thomas, founder and managing partner of Expedition Growth Capital, said in a statement. “In the nearly eight years they have been working, they have built a groundbreaking solution that is enabling companies with thousands of employees to track, monitor and manage software usage. We are pleased to work closely with them as the company’s first external investor and look forward to being part of their growth journey.”