A unique aspect of tracking the development of local and small business SaaS solutions is the market’s infinite size. There are the companies that we are all very familiar with. These are the “household” brands like Intuit, American Express, Mastercard, Microsoft, Apple, Yelp, etc. Next are the newer, emerging brands. We’d add YEXT, Uberall, Duda, Thryv, Mono, and others to this list. These are the brands that industry insiders are familiar with.
And then there’s the long tail of SaaS solutions. We’ve just come across two such companies that might be worth keeping an eye on.
Thriving in Any Climate
The first is a company called SpotOn. From PitchBook we learned the company closed a $60 million funding round in late September. That takes it to an estimated post-money valuation of $560 million. To date, $190 million has poured into the company. This latest round comes after the company closed a $50 million Series B at the onset of the pandemic.
SpotOn focuses its solution on serving local and small businesses operating in the retail, services, and restaurant sectors. In the press release announcing the latest raise, the use cases focus on how restaurants, in particular, are accelerating their adoption of new SaaS technology. The SpotOn solution offers business owners a digital means of managing their appointments, eCommerce, online ordering, and reservation management. All while providing marketing, website development, omni-payment, and POS solutions.
“SpotOn is committed to SMBs by providing them with the tools they need to thrive in any climate,” said Matt Hyman, co-founder of SpotOn, in the press release announcing the raise. “We will continue to create innovative products and further our go-to-market approach to ensure merchants nationwide have access to the tools they need to run their businesses.”
According to PitchBook, the company has 1,000 employees operating in San Francisco, Chicago, Detroit, Mexico City, and Krakow, Poland. We’re presuming the Poland and Mexico teams focus on engineering. While the U.S. operations focus on product, marketing, and business development.
Based on a quick review of SpotOn’s website, we’re guessing the company has multiple integrations with “point solutions” providers. The only obvious partnership is with Gusto for payroll, though we assume there are other private labeled deals inside of the offering. SpotOn is playing in a crowded field. And we expect a period of consolidation is coming over the next 12 to 18 months.
Odoo: The Belgian Zoho
A second company that’s come to our attention is Odoo. The Brussels, Belgium company landed a $90 million round in late 2019 bringing their total venture investment to $105 million. The company positions itself as an open-source provider of a broad suite of solutions. You might think of Odoo in the same way you might think of Zoho. Lots and lots of point solutions under a broad umbrella. The company claims to have some 4.5 million users on the platform and nearly a thousand employees. This is relatively the same number as SpotOn. Here’s how the company explains itself on its website:
“Our mission is to provide a range of easy to use business applications that form a complete suite of tools to accompany any business need. We give millions of companies easy access to the software they need to run and expand their business.
“Here at Odoo, we have developed 30 main applications that are regularly upgraded. In addition, our community of more than 1500 active members, have contributed another to 16000+ apps to cover a wide variety of business needs.
“With the ‘On-premise’ offer, Odoo is the most installed business software in the world. It is used by over 4,500,000 users worldwide ranging from startup companies (1 user) to large enterprises (300,000+ users).”
Surveying the Landscape
Investors must be eyeing Shopify’s $131 billion valuation when they put money into companies like SpotOn and Odoo. This isn’t to suggest these are not good companies. But in a marketplace that gives Shopify that kind of valuation, investors are wise to scour the globe for companies that might have a shot at being a category leader.
If nothing else, SpotOn and Odoo will be in the acquisition sights of key players in the local, small business SaaS ecosystem. We’ll continue to keep an eye on these two companies as well as the hundreds of others that put the small business owner at the center of their businesses.