Business is taking spend management seriously, says Coupa CEO Rob Bernshteyn, arguing that the firm he heads up has earned the “legitimacy” to be on the radar of the largest enterprises.
That's something that was front-of-mind when the firm was going public, he says:
Our primary driver was to get to a position where we had the rightful legitimacy in the marketplace to get into what we call the early adopter cycle with some of the largest companies in the world taking us very, very seriously…I would say now, 10-plus quarters in, it’s quite clear that that legitimacy is there. We’re taking on some of the largest, most complex multi-national deployments in the world, multi-country, multi-lingual, multi-currency, massive amounts of complexity. We’re getting these customers live and through the reference ability and legitimacy that we’re creating in a market, we’re starting to get closer and closer to what many would call a tipping point in winning a very, very large total addressable market.
Coupa this week turned in its Q1 2020 numbers. While one time items saw the firm turn in a loss of $20.5 million, against $15.5 million last year, revenues were up 44% year-on-year to $81.3 million. Some $73 million of that came from subscription revenues, up 46% year-on-year. Those subscription numbers are getting bigger, says Bernshteyn:
If you look historically, virtually every quarter over this 40 plus quarters that we’ve been at this, we’ve grown our annual subscription value per deal and that growth is really aligned with the amount of value that we can offer the kinds of customers that are joining us. They’re getting more robust functionality, they’re getting much broader depth of adoption, they’re getting the ability to solve more complex problems and that’s commensurate with the annual subscription price we’re charging them….There were, as we’ve grown, hurdles to overcome as we went international, as we took on a larger and larger footprint. But we feel really confident in terms of having overcome all those hurdles to the extent that we could support some of the largest organizations in the world and at the same time be able to very dynamically and quickly configure solutions for mid-market customers.
New customer wins for the quarter included the American Red Cross, Arkansas Blue Cross and Blue Shield, Baylor University, Dairy Farm international, Exxaro Resources, Goodwill of Central & Southern Indiana, Kroger, MongoDB, NEC America, Provident Mexico, Wikimedia Foundation. During the quarter, north of 35 customers went live and it was to the use case exemplars that Bernshteyn points:
Campari Group, a major player in the global branded spirits industry recently went live with Coupa in Italy. I had the pleasure of visiting them recently as they shared their Business Spend Management best practices with members of our Coupa community at the Campari Museum.
nThrive, who is empowering healthcare for everyone in every community is now live with Coupa BSM in the deployments that included Coupa contingent workforce, the capabilities we’ve integrated from our acquisition of DCR Workforce. Soon after their five-month implementation, nThrive enabled over a 100 P2P suppliers and more than 60 contingent workforce suppliers as well.
Santos Limited, a leading Australian natural gas developer, went live with Coupa BSM in just under 5 months as part of a strategic initiative to streamline procurement processes and improve the buyer experience. Even with the complex Oracle integration landscape, the implementation was completed at lightning speed, helping Santos’s transition of legacy procurement and contract systems and start bringing its spend under management.
Telenor, a major global telecommunications company recently went live with Coupa BSM in Singapore and Denmark, as part of Telenor’s worldwide rollout plan. Supported by KPMG as the implementation partner, Telenor is now extending its rollout of Coupa in Sweden and Bangladesh.
US Concrete, a leading producer of construction materials in major markets across the United States went live in Q1 and is using Coupa to manage spend across the entire company in one single platform. US Concrete selected Coupa to drive both operational efficiency and savings and because Coupa’s intuitive platform could easily be adopted by new employees, which highlights the user-centric nature of our platform, also known as the letter U in Coupa.
Community and contracts
Bernshteyn also pitches the ‘community intelligence’ that Coupa is picking up from the $1.2 trillion of spend that it’s managing:
Cumulative spend under management is the primary source of fuel for community intelligence and we continue to see strong traction in this area. Our customers are using the prescriptive insights, also known as the letter P in Coupa, that we are delivering to benefit their businesses in a whole host of different ways. For example, Teleperformance, a business process outsourcing company providing omni-channel experiences to customers around the world is using community intelligence to enhance its speed and efficiency. Noting that PO approval cycle times have been flat for several months, Teleperformance use community intelligence to show individual approvers their own approval cycle times versus that of other industry leaders in Coupa and in real-time. They saw a 54% reduction in PO approval time, despite a 175% increase in the number of POs processed, increasing their speed of PO approval is allowing Teleperformance to get needed goods and services to their buyers that much faster.
A big push for Coupa in Q2 will center around Contract Lifecycle Management (CLM) following the closure of the firm’s acquisition of Exari. Bernshteyn says of work on integration with the Coupa platform:
I have a very distinct view on this space of Contract Lifecycle Management and that it has a great deal of value, but that value really presents itself when integrated into a transactional platform. And if you look at some of the best-in-class reports out there by folks around the adoption of CLM as a stand-alone, you’ll find that the vast majority of them use it primarily as a centralized contracts repository, but they’re not getting all of the value that they could be from the whole life cycle of requesting a contracts to creation, approval, negotiation, all of the compliance components and alerts the contracts that are going to expire and whether or not you spending against them and optimizing the contract lifecycle of soup-to-nuts.
A strong start to the new fiscal year with Wall Street taking a welcome positive view of the numbers. One thing that continues to impress around Coupa is the growing list of use case examples that get referenced. I know it’s basically a diginomica cliche, but the best proof points are your customers. Be judged by the company that you keep, as it were. On that front, Coupa is ticking all the right boxes and Bernshteyn’s claim to legitimacy is itself quite legitimate.