Specialist
Former VP at Coupa Software Inc
Agenda
- Coupa Software (NASDAQ: COUP) and its offerings, noting how the company has expanded with new products through innovation and M&A
- Growth opportunities and risks, highlighting Coupa Pay and need to balance innovation with ease of use
- Increasingly complex industry dynamics in light of Coupa’s growth and many more competitors
- 1-3-year outlook and potential acquisition of the company given decrease in company value
Questions
1.
Could you describe Coupa’s business and how it’s evolved? My sense is the company has built out a BSM [business spend management] offering to more of a platform with many different modules.
2.
Coupa seems to lead all of its presentations with this notion that Coupa is to BSM, as Salesforce is to CRM [customer relationship management]. To what extent do you think that’s an apt analogy?
3.
There are many companies in and around the BSM sector. What are the 2-3 most significant ways that Coupa differentiates in the marketplace?
4.
You mentioned this concept of prescriptive insights. I’m assuming you’re referencing Coupa’s community intelligence offerings. How important do you think those are, not just in the context of making customers happier or providing more value, but do those actually help companies decide to buy and standardise on the company’s platform?
5.
You mentioned Coupa being cloud-native, especially a lot more so than some of its primary competitors. How does that translate to a competitive advantage in the marketplace? Is it part of the easier to transact? Are there other elements that make the cloud particularly important? I’m assuming it makes gathering, analysing and reporting community intelligence data more possible.
6.
To what extent would you argue that Coupa’s approach, technology and cloud orientation have helped the company build out this larger, more expansive platform, where there is strong integration, and how important is that? You mentioned point solutions and how it has taken a very different approach. How is that platform approach not just differentiated, but really helps Coupa from a competitive perspective?
7.
Many cloud companies talk about how easy it is to deploy and use a particular solution, and I think that leads to much shorter sales cycles for many cloud companies, as opposed to their legacy competitors. Given the nature of what Coupa is doing and how comprehensive it is, are the sales cycles a lot longer? What are the typical sales cycles that you saw, and how much of that was complicated by all the different parties who needed to buy in?
8.
You’ve referenced ROI as being a big part of the decision-making process in the implementation of the platform. Does Coupa typically reference an expected ROI, and over what time frame is that expected, given similar customers doing similar things?
9.
Coupa uses the acronym Pipe – procure, invoice, pay and expense – to highlight its four main areas of focus. What is your estimate for the revenue contribution percentages from each?
10.
Do you think procure and invoice still account for three-fourths of Coupa’s revenue 3-5 years from now? Where do you think that goes, because Pay is newer and a large opportunity the company has alluded to? There has also been more recent focus on expense.
11.
How does Coupa approach innovation and balance it with the need for simplicity? The company will continue to have those procure and invoice modules, but then it’s adding other elements such as Pay or T&E [travel and expense]. Do you think the company is largely done with building out the core and supporting modules, because it has done a lot on that front? Have the platform and offerings gotten too complicated? You referenced the ease of use was one of the primary drivers of adoption, and suddenly you have all these different modules which perhaps are confusing things.
12.
Due to the pandemic, budgets for so-called back-office spend were pulled back. Do you think those budgets have been coming back, or are those customers still in a recovery phase?
13.
Coupa’s three primary competitors from a platform perspective appear to be Oracle, SAP and Workday. Is that fair? Who is the most and least formidable of that group and why?
14.
What’s interesting is the only two companies that seem to really be platform ERP-type [enterprise resource planning] solutions and source-to-pay solutions were in fact Coupa and SAP. How did that competitive dynamic play out between the two companies?
15.
You mentioned Coupa, Ivalua, Jaggaer, GEP and Ariba as the main source-to-pay providers. Are any of those particularly more formidable on that front? Are the offerings comparable? Do people go with those in part because they just don’t want the broad-based BSM offering, they want something more targeted and maybe less expensive?
16.
Coupa references its track record of 30%-plus annual revenue growth going back several years. What would you point to as the primary 2-3 growth drivers for those increases? You mentioned the 2019-20 period where it had a lot of innovation, and took business from SAP.
17.
What do you think will be Coupa’s 1-2 primary revenue growth drivers over the next 1-3 years?
18.
Many people aren’t sure how Coupa will seize the opportunity with Coupa Pay, because they see a company such as Shopify, that has been so successful with its native payment solution, but many companies Coupa is targeting for adoption may already have their preferred payment providers and may not want to make so many changes so quickly. What are the challenges there with both adoption and pricing, given the nature of the customer base?
19.
You referenced the big numbers earlier related to transactions and customers in particular. Coupa will be reporting its quarterly and annual results within the next couple of weeks. What are you thinking the company could communicate that we should be considering ahead of that? People were in fact disappointed by the revenue and billings growth deceleration when it reported its Q3 2021 results.
20.
Is Coupa more squarely focused on the mid-market because those companies could use assistance with deployments and payments, or is the company focused on Fortune 500 customers, the likes of which it won from SAP a couple of years ago? How do you see that customer mix changing over time, if at all?
21.
You mentioned partnerships being important in terms of Coupa looking to APAC and growing there. How would you assess the partner network, specific partnerships and the opportunities those have afforded the company, and what will those potentially lead to? How important are partnerships?
22.
Could people think about Coupa as a potential M&A target? It’s a USD 9bn company, or at least it was recently, but just four-and-a-half months ago, it was an USD 18bn company, and one year ago it was a USD 27bn company. Could Coupa be an acquisition target, given all that it’s accomplished over the last five years, and who do you think the suitors could be?
23.
What is your 1-3-year outlook for Coupa, and what do you see as its biggest risk?
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