San Mateo, CA-based Coupa Software Inc is set to start trading on Oct 6, 2016 at the Nasdaq stock exchange under the symbol “COUP”. The cloud-based software platform recently fixed its price for Initial Public Offering (IPO) at $18 per share, which was the high end of its previously given range of $16--$18 a share.
At the current price, Coupa Software is expected to raise almost $133.2 million by selling 7.4 million shares. Earlier, the company had anticipated to sell 6.7 million shares at the price range of $14--$16.
Coupa Software provides a unified, cloud-based spend management platform that connects more than 460 organizations with above 2 million suppliers globally. Per S1 filing the platform “unites the three core aspects of spend management — procurement, invoicing and expense management — and has the ability to manage both direct and indirect spend”.
Battery Ventures and EL Dorado Ventures with 16.2% and 13.9% ownerships are the major venture capitalists. In the last round of funding (G series) Coupa Software raised $165 million from the venture capitalists.
Spend Management: A Fast Growing Market
Coupa Software’s platform helps enterprises keep a tab on daily expenditures. Per Techcrunch, the company claims to have saved their customers- which include the likes of Molina Healthcare and Staples – almost $8 billion.
Coupa Software is well positioned to benefit from the strong growth prospect of the spend management software market, which is estimated to be worth $16 billion in 2016. Per IDC the global market for procurement and invoicing applications will reach $4.3 billion in 2016 and will grow to $5.3 billion by 2019.
However, the market is dominated by more established players like Oracle (ORCL - Free Report) and SAP AG (SAP - Free Report) , which is a significant headwind for Coupa Software. We note that the company is yet to report profits, although revenues surged 64.6% to $83.7 million in fiscal 2016.
Coupa to Gain from a Rebounding IPO Market
After a weak first half of 2016, the technology IPO market has rebounded strongly over the last couple of months. The recovery was primarily led by the likes of Acacia Communications (ACIA - Free Report) and Twilio (TWLO - Free Report) .
Per data available from Renaissance Capital, Acacia, which has a Zacks Rank #2 (Buy), is the most successful IPO in terms of returns (almost 393.7%) over the last 12 months. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Radio-frequency identification tag provider Impinj and Big Data software developer Talend were some other successful names. Last week, hyperconverged integrated systems (HCIS) provider Nutanix soared 133% on its debut.
We expect Coupa Software’s IPO to benefit from the recovering technology market.
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