Germany’s Xentral nabs $20M led by Sequoia to help online-facing SMBs run back offices better – TechCrunch

Small enterprises remain one of the most inept sectors of the business market, but the growth of cloud-based services – easy to buy, easy to provision – has helped that change in recent years. Today, a more promising startup outside Europe building software to help SMEs run online businesses, is announcing some funding to better tap into the opportunity to build these services and meet growing demand from the SME segment .

XentralA German startup that develops enterprise resource planning software covering a variety of back-office functions for the average online small business has raised a $ 20 million Series A.

The company’s platform today covers services such as order and warehouse management, packaging, fulfillment, accounting and sales management and has 1,000 customers in Germany – including direct-to-consumer brands such as YFood, KoRo, Nu. Company and Flylerarm.

But Xentral’s co-founder and CEO, Benedict Souter, said the ambition is to expand to the rest of Europe, and eventually to other geographies, and to fold in more services for its ERP platform, such as A more powerful API to allow that customers. To integrate more services – for example in cases where a business can sell on its site, but at the same time Amazon, eBay, social platforms and more – to bring their businesses to a wider market.

Primarily, he said, the startup wants to “build a better ecosystem to help its customers run their own businesses better.”

The money is being led by Sequoia Capital, with the Visionaires Club (A) B2B-focused VC from Berlin) Is also participating.

The deal is notable for the first investment of a prolific, high-profile VC in Europe as the region is officially starting business. (Sequoia has previously supported several startups in Europe, including Graphcore, Curlna, Tessian, Unity, UIpath, N8N and Evervolt – but all of those deals were done remotely.)

Augsburg-based Xentral has been around as a startup since 2018, and “as a startup” is the operative phrase here.

Sauter and his co-founder Claudia Sauter (who is also his co-founder in life: she is his wife) originally built the initial prototype to serve for themselves.

The pair were running their own business – a hardware company they founded in 2008, not by selling nails, hammers and wood, but circuit boards designed by them, computers with other hardware, and other connected objects. For making. Around 2013, as the business was starting to pick up steam, they decided that they really needed better equipment to manage everything on the backend so that they would have more time to build their actual products.

But Bene Sutter quickly discovered a problem in the process: Shopify and its various competitors may be there to help small businesses manage e-commerce on the front end, but when it does many of the processes on the backend There was really no ‘no’ t single, easy solution when it came to parts (remember that this was eight years ago, a time before the showshiffs of the world were to expand into these types of devices). Being a DIY and technical persuasion – Sauter had studied hardware engineering at university – he decided that he would try to manufacture the tools he wanted to use himself.

Sauters used those tools for years, until, without much outbound effort, they began to receive some inward interest from other online businesses to use the software. This led to Sayers balancing his own hardware business and selling software until around 2017-2018 when he decided to complete the hardware operation and focus on the software the entire time. And since then, Xentral was born. It now has some 65 employees, in addition to 1,000 customers, working on developing the platform.

Focus with Xentral is a platform that is easy to implement and use, no matter what type of SME you are, as long as you are selling online. But still, Sauter pointed out that the second common thread is that you need at least one person in the business who champions and understands the value of ERP. “It’s really a mindset,” he said.

The challenge with Zentraal in that regard will be how and if they can bring more businesses to the table and tap into the type of equipment it offers, many other players at the same time also offering the same market. lets see. (Others in the same general category of building ERPs for small businesses include online payment providers Sage, NetSuite and Accumatic.) ERP overall. This kind of experience By 2025 there will be a market of $ 49.5 billion.

Sequoia and its new partners in Europe, Luciana Lixandru – who are joining Zentrail’s board with Luciana Lixandrew and visionaries Robert Latcher – although they believe that a new kind of provider from the ground up and out of Europe specifically It is a golden opportunity to build. Target the opportunity in that area.

“I see Xentral being built Actually A platform for any SME to run their businesses online, ”she said in an interview. “ERP seems a bit scary especially because it thinks of companies like SAP, longer implementation cycles, and so on. But here is the opposite. He describes Accentral as “very lean and easy to use because you start with a module and then add more. For SMEs it should be super simple. I see it becoming like Shopify for ERP. “