Camunda, which has developed open source workflow automation software, has raised a €25 million (approximately US$28.4 million based on recent exchange rate) Series A round led by Switzerland’s Highland Europe.
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Camunda claims that its software can help companies have “visibility into business operations across distributed systems,” helping companies “overcome [workflow] challenges resulting from digital transformation.”
The financing marks the first outside investment for the previously bootstrapped Berlin-based startup, CEO and co-founder Jakob Freund told Crunchbase News.
In fact, the company was reluctant to raise VC money at all, managing to be profitable while steadily grow on its own, the executive said.
“We actually never pitched to VCs. Over the years, we’ve been contacted by close to 100 venture firms reaching out in cold fashion due to our size and velocity,” Freund said. “But we simply built a relationship and trust with Highland Europe. When it came to choosing a [venture] partner, we were looking for a mix of smart, ambitious, and extensive network, but also a firm that was friendly and humble too. We didn’t find that with many other VCs.”
From Straps To Cash
Camunda was originally founded in 2008 as a consulting business focused on business process management. Freund and his partner, Bernd Ruecker, worked to help organizations automate their business process management (BPM) with open source technology.
“In the first five years, we learned a lot about the business process industry and the products,” he said. “A lot of the larger companies’ offerings were pretty heavyweight and not really geared toward developers.” (By larger companies, Freund meant the likes of IBM and Oracle)
So, in 2013, the pair pivoted and decided to transition the company into an open source BPM software vendor business. It was profitable from day one, according to Freund. Today, Camunda has more than 200 paid enterprise customers—including AXA Insurance, Intuit, T-Mobile, Universal Music Group, and Zalando—that use its platform to perform functions such as eCommerce order executions, stock transactions, and insurance claim settlements.
Camunda also has thousands of open-source users that come from a variety of industries, including financial services, telecommunications and insurance, as well as software companies seeking to embed Camunda’s workflow technology, according to the company.
Camunda’s annual recurring revenue (ARR) has more than doubled over the past 12 months and the staff has grown to more than 100 people compared to 13 in 2013, Freund said.
The company decided to raise external capital because it wants to accelerate the development of its technology and “invest heavily in community,” according to Freund. It also wants to expand in the U.S.. It already has a second office in Denver but has plans to open more offices in the country, as well as certain cities in Europe and Asia-Pacific.
Sam Brooks, partner with Highland Europe, told me that his firm had been knocking on Camunda’s door for about two years trying to convince the company to take its capital.
“Camunda’s momentum and growth without bringing in capital is really exceptional,” he said.
Brooks described Highland Europe as growth-stage investors that only put money in businesses with more than $10 million in revenue that are growing quickly and are, preferably, capital efficient.
“We’ve been quite interested in this market and spent time with some of the other businesses. We kept hearing great things from our portfolio companies that are customers, and we like that Camunda is viewed as developer-first,” he said. “Developers are some of the hardest people to sell software to. We were incredibly impressed.”
In general, the global workflow automation market is expected to reach nearly $17 billion by 2023, up from $4.7 billion in 2017, according a recent report. Meanwhile, investors continue to pump money into open source software companies, as you can see in the chart below.
Illustration Credit: Li Anne Dias