The clock is ticking on Coupa Software’s upcoming IPO… tick…tock.
The big event will take place on Thursday October 6th with when the company will issue 6,700,000 shares at between $14 and $16 a pop.
The e-procurement provider founded in 2006, has generated $109.5 million in revenue in the last year despite reporting a net loss of $45.3 million for the same period.
Coupa’s IPO comes at an interesting time for the tech industry with 2016 being one of the slowest IPO years in recent memory. Some pundits are predicting a strong return to form for the IPO market while others are more bearish suggesting that slow IPO rates may be here to stay.
Procurement’s first unicorn?
While it’s not the first time procurement technologies have reached the mainstream media, Ariba and SAP took care of that a few years back, Coupa is certainly flying the procurement flag into the burgeoning silicon valley tech space. Could interest in Coupa’s operations spark a broader discussion about the importance of B2B procurement systems? Could enterprise B2B become the new darling of wall street?
Back in June of 2015, Coupa earned the much lauded ‘unicorn’ title when a funding round to raise $80 million gave the firm an estimated valuation of over a billion dollars. Interestingly though, Coupa’s revenue is much lower than most firms with a similar valuation causing some to suggest it may have been over-valued.
A buying spree in the offing?
Many, including SpendMatters Jason Busch have suggested that Coupa may be looking to raise money in order to buy smaller technology providers to strengthen its market position and reduce competition the space.
In a recent article Jason claimed the following.
Coupa has been acquisitive in the past with small deals and shown its willingness to expand its suite inorganically (replatforming acquisitions and IP on its own stack). An IPO would likely provide a war chest to expand its corporate development efforts and speed up the pace of acquisitions in the sector overall. Coupa’s past acquisitions include Contractually, ZenPurchase, TripScanner, InvoiceSmash and Xpenser.
Impact on current users.
What about me? I hear you cry. I use Coupa. What does mean for my day-to-day job?
The truth is very little. I believe that of all the ‘exit strategies’ the company could have followed to begin to repatriate Coupa’s investors, the IPO will have the least impact on the end user. An IPO means that Coupa remains Coupa. Like it or lump it, little will change. Management structures will remain similar, product roadmaps will carry on much as they have in the past. In short you know what you’re getting. With the extra cash in the bank you might just be getting it a little more quickly as well.
The other option would have been for Coupa to become acquired(by the likes or Oracle or similar. This alternative would have likely had an impact for end users. A long winded integration, back into the existing technologies of the mother ship, different reporting structures, different budgets and a different culture all have the potential to alter the end user’s experience.
Anyway, that’s my take on the Coupa IPO. Do you own stock? Will you buy stock? Will you become rich and walk away from the procurement game for good?