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Software asset management \u2014 an area of enterprise IT designed, in part, to help companies save money \u2014 continues to draw a lot of money itself. In the latest development, Xensam<\/a> \u2014 a startup out of Stockholm that provides AI-based tools to help businesses understand and track where and how software is being used \u2014 has raised $40 million, its first outside funding since being founded eight years ago.<\/p>\n The funding is coming from a single investor, Expedition Growth Capital out of London. Oskar F\u00f6sker, Xensam\u2019s CEO who co-founded the company with his brother Gustav (the CTO), said it will be used to continue developing its AI technology stack, to hire more people (it\u2019s now at 100 employees) and to break into the U.S. market.<\/p>\n The valuation is not being disclosed, but F\u00f6sker said he and his brother remain majority shareholders. The company itself has 200 customers \u2014 one of the bigger names including Volvo\u2019s Polestar and Northvolt \u2014 and annual recurring revenues are growing at 126% annually, but it\u2019s also not disclosing actual revenue numbers.<\/p>\n The world of software access management, which others in the space sometimes call software expense management<\/a> or license management<\/a>, is a crowded one, not least because the problem getting tackled is a big one, and it\u2019s being tackled for multiple reasons.<\/p>\n Nearly $900 billion<\/a> was spent globally by organizations on enterprise software in 2023, and some in the field have estimated that, thanks to the explosion in cloud computing and software sold as a service, a larger organization can have hundreds or even thousands of different licenses under its roof.<\/p>\n That can have implications across disparate areas like business spend, productivity and security for that organization, so it\u2019s no surprise that we\u2019ve seen a rush of startups and larger tech companies rushing to address the challenge of trying to track and understand the bigger picture of what is being used, where, and why.<\/p>\n Xensam itself got its start out of that competitive fray. The two founders previously worked at another company called Snow Software, a big name in this space, which was scaling fast but losing pace, in their opinion, when it came to cutting edge developments, such as the use of AI to better track SaaS usage.<\/p>\n \u201cAfter a while it was clear that a hole was about to open up in the market, and no one showed any intentions to fill it,\u201d Oskar said. \u201cThis hole was to be the first, native SaaS player in the business.\u201d Sidenote to Snow that speaks to potential valuations in this space: one of Snow\u2019s biggest competitors was a company called Flexera, and last year Flexera acquired Snow<\/a> after it was reported that Snow was looking to sell itself for around $1 billion<\/a>. Flexera meanwhile was last valued at nearly $3 billion<\/a> in 2020. Other big deals in this area have included IBM buying Apptio for nearly $4.7 billion.<\/p>\n Xensam\u2019s approach is to use AI to comprehensively scan and understand what is going on across an organization\u2019s network, giving a real time picture of thousands of applications that might be in use across both cloud and on-premise environments.<\/p>\n \u201cWe\u2019re using AI for various parts of the technology,\u201d F\u00f6sker said. \u201cWe\u2019re using it to handle extreme amounts of data in the software normalization process,\u201d which he describes as the process where raw data gets normalized into standardized applications that is populated with meta data. \u201cThis is the key reason why we\u2019ve been able to completely beat the competition.\u201d He said that it\u2019s also using AI in the front end with a chatbot trained on its system and software licensing rules \u201ccan interact directly with the system and provide everything from information from the system to prebuild reports based on an open specification.\u201d<\/p>\n He doesn\u2019t go into detail around what, exactly, it plans to launch next, or where it believes there remain holes in the market, but said that it plans to launch more products in Q2.<\/p>\n Their experience at Snow is also why the company bootstrapped its business up to now. \u201cWe don\u2019t believe that a financial structure based on a Series A, B, C etc. for survival is a sound business model. It is based on too many external factors,\u201d he said. \u201cWe knew we would have to be financially stable\u2026 to be sustainable.\u201d<\/p>\n The turn to eventually taking VC money, he said, was because they had figured out the business model on their own already.<\/p>\n \u201cWe\u2019ve seen many companies raising money and losing a beautiful company culture while all focus is being changed to growth,\u201d he said. \u201cTherefore, it was very important for us to find an investor that also shared our cultural values, which we believe we have in Expedition.\u201d<\/p>\n For its part, Expedition describes itself as typically the first outside investor in startups \u2014 meaning it works with a lot of bootstrapped founders so understands that model perhaps better than some others.<\/p>\n \u201cXensam is one of the most impressive European growth companies we\u2019ve come across,\u201d Oliver Thomas, founder and managing partner at Expedition Growth Capital, said in a statement. \u201cIn the nearly eight years they have been operating, they have built a critical solution which is enabling companies with thousands of employees to track, monitor and manage software usage. We\u2019re delighted to be working closely with the company as their first external investor and look forward to being a part of their growth journey.\u201d<\/p>\n<\/p><\/div>\n