Software asset management, a sector within business IT designed to aid companies in cost-saving efforts, remains highly lucrative. Xensam, a startup based in Stockholm, recently secured $40 million in funding to support its AI-driven tools that assist businesses in comprehending and monitoring software usage patterns. This funding round, the company’s first external investment since its establishment eight years ago, was facilitated by Expedition Growth Capital, a London-based investment firm.
The infusion of capital, as stated by Oskar Fösker, Xensam’s CEO who co-founded the company with his brother Gustav, will be allocated towards enhancing the firm’s AI technology infrastructure, expanding its workforce (currently standing at 100 employees), and venturing into the U.S. market. Despite this development, the pricing details of the shares held by Fösker and his brother remain undisclosed. Xensam boasts a clientele of 200 companies, including prominent brands like Volvo’s Polestar and Northvolt, with its annual recurring revenues witnessing a remarkable 126% growth rate. However, specific revenue figures are not publicly disclosed by the company.
The realm of software asset management, also known as software expense management or license management, is characterized by intense competition due to the sheer scale of the issue and the diverse motivations driving its resolution. Global enterprises collectively spent nearly $900 billion on enterprise software in 2023, with projections indicating that large corporations could be managing hundreds or even thousands of software licenses owing to the surge in cloud-based services and software-as-a-service models.
The emergence of startups and established tech giants racing to address the complexities of monitoring software usage underscores the critical importance of understanding the utilization landscape for businesses, impacting areas such as expenditure management, operational efficiency, and organizational security. Xensam’s inception was catalyzed by this competitive landscape, with its founders identifying a market gap while working at Snow Software, a prominent player in the industry. The strategic positioning of Xensam was further emphasized by the acquisition of Snow by Flexera, highlighting the substantial valuations and acquisitions prevalent in this sector.
Employing AI technology, Xensam offers a comprehensive solution to organizations, enabling real-time visibility into software applications deployed across both cloud and on-premises environments. Fösker underscores the pivotal role of AI in data processing and software standardization, emphasizing the company’s competitive edge in the market. The utilization of AI extends to customer interaction through chatbots, streamlining information dissemination and enhancing user experience.
Looking ahead, Xensam plans to introduce new products in the upcoming quarter, leveraging its industry expertise and strategic approach to business growth. Despite the decision to accept VC funding, the company remains committed to its core values and responsible financial management, a principle that guided its bootstrapped journey thus far. Expedition Growth Capital’s investment signifies a shared vision for sustainable growth and operational excellence, positioning Xensam for further expansion and market leadership in the evolving landscape of software asset management.
