Coupa Raises $40M For Cloud Procurement Software, Takes On SAP
Coupa Inc., which helps companies track spending on items like travel and office supplies that can quickly eat into corporate budgets, raised another $40 million, bringing total funding to $87 million.
The fundraising went so quickly that Coupa received six term sheets from prospective investors within 48 hours, according to Chief Executive Rob Bernshteyn. Meritech Capital Partners led the round, with participation from Icon Ventures, Northgate Ventures and all current investors. Valuation is not disclosed.
“The biggest reason to raise money is we think our opportunity is massive,” said Mr. Bernshteyn, a Russian immigrant whose first business was selling baseball cards as a teenager in New York. “We’ve really just begun.”
Coupa uses the cloud to help companies track expense reports, procurement contracts and other vital but unglamorous information, integrating with their current enterprise software and enabling users to feed data directly into the system from their mobile phones.
An employee who has dinner at an Applebee’s restaurant in Madison, Wis., for instance, could use his mobile phone to take a picture of the receipt, which is sucked into the Coupa wallet and automatically entered as a line item on an expense report.
“It knows where you are based on GPS,” Mr. Bernshteyn said.
He says Coupa has been beating SAP AG, which in 2012 acquired Ariba Inc. for about $4.3 billion to bolster its presence in the corporate procurement market, for deals. SAP could not be reached for comment.
One new customer, the French health-care company Sanofi, is now piloting Coupa’s software after a competitive sales cycle that lasted about six months.
The company said it wanted to cut transaction costs and get a procurement system that’s easier to use and more streamlined, without having to customize it. The goal is roll Coupa out to 50,000 users in 85 countries.
Other Coupa customers have no procurement systems–which have tended to be complex and expensive–and are upgrading to Coupa from Microsoft Excel, according to Meritech Capital Managing Director George Bischof, who’s a board observer.
“It’s not a Frankenstein composite of acquisitions that are difficult to integrate…With Coupa you can get up and running without it costing you an arm and a leg,” Mr. Bischof said.
Coupa has hovered around break-even for two of the last three quarters and claims 100% revenue growth year over year, with 95% of customers renewing. The new money will be invested in research and development and international expansion. An IPO is “plausible,” Mr. Bernshteyn said.
Current investors Crosslink Capital, Mohr Davidow Ventures, Battery Ventures, El Dorado Ventures and Blue Run Ventures also participated in the round.
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