Daily Archives: September 21, 2016

Coupa IPO: Good or Bad?

Coupa has filed for a 75 M IPO. Coupa is going to go public, like heavyweights before it, and things are going to change. The question is, for better or worse?

Many bloggers, analysts, and even journalists have written much about the subject, and you can probably buy at least a dozen in-depth analyst reports by now advising you on whether you should invest, how much, when, and how to make money off of it.

And if you are interested in that, go and Google that Sh!t, because, you guessed it, SI doesn’t care about that in the least. What it cares about, and the only thing it cares about, is whether or not its good for Procurement. This blog is about education — process transformation, technology, and talent enablement — not about how to make the most money (or even save the most money, because it’s not savings, its value generated … savings are here today, gone tomorrow without foresight).

So is it good for Procurement? Yes and No. That’s right, Yes and No!

The 75M will help them considerably expand their platform, their support, their global reach, and, most importantly, their sales force. As with any big company that goes IPO, they will need ramp up their sales quickly to support their overhead, which means more big ticket sales. The only way to do this will be to focus on the Global 3000 or the large mid-market companies growing fast that are willing to invest extra dollars in an effort to crack the Global 3000. And if you are one of these companies, they are going to do everything they can to be the perfect solution for you, or at least the best option you have, as they try to win the P2P market away from SAP (Ariba), GEP, and SciQuest and fend off the European heavyweights, like Basware, that are making inroads in their home turf.

But if you are a mid-market Procurement organization, or smaller, and the Procurement organization that Coupa was originally designed for when they launched on Procurement Independence Day ten years ago, not so much.

Big organizations want big, extensive, bloated, solutions with lots of features, and lots of support, that come with big price tags — price tags that are often higher than a smaller organization wants to, or can, pay. And even though Coupa could offer a slimmed down offering at an affordable price tag if they wanted to, it’s not going to be their first priority when they have to prove the value of their IPO. So if you are in this group of Procurement organizations, its not so good for you – at least not in the short term. (Longer term, they could create a platform license model for their core, like Trade Extensions does, and allow a third party to bulk sell at lower rates in exchange for them taking over support and the associated overhead costs, the same way many companies offer SAP support, but that’s not likely in the short term.)

So that’s the short answer for Procurement organizations, which is not the same answer for Investors or for Coupa, but we’ll leave those answers to the analysts and investment advisors.