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Coupa Software Idea Proposal (COUP)

Coupa Software Idea Proposal (COUP)

Can Coupa entice enterprises with established payment systems to switch to Coupa Pay?

Report Available: November 14, 2019


Blueshift’s ongoing research found COUP blowing past Wall Street expectations with sales of its procurement software. To take advantage of more than $1 trillion in spending under management on its platform, the company has unveiled Coupa Pay. COUP has been very deliberate in its rollout of the new product and offered little visibility into when it might generate meaningful revenue. Coupa Pay will have a huge challenge in getting enterprises that make supplier payments through their ERPs to switch.



  1. COUP, a developer of software that helps businesses track and manage indirect spending, continued its string of blowout performances in Q2. Revenues surged 54% to $95 million, easily surpassing analysts’ estimates. The results prompted management to raise its guidance for full-year revenue to $370 million from its earlier forecast of about $340 million.
  2. A new initiative that has investors excited is the company’s Coupa Pay module which allows customers to make payments to vendors through the COUP procurement platform. Coupa Pay is an effort to get a cut of the more than $1.3 trillion in cumulative spending under management on COUP’s platform. Coupa Pay’s three key prongs include a virtual credit card for purchase orders; a tracking system for early pay discounts called Accelerate; and an invoice payment function. CEO Rob Bernshteyn said on the company’s most recent earnings call that invoice payments – the ability for customers to pay vendor invoices that are generated through the procurement platform – is the “most interesting” medium- and long-term opportunity. JPM, BCS and C are among the big banks offering virtual credit cards on COUP’s platform.
  3. COUP has been moving very slowly in rolling out Coupa Pay and it is not clear how quickly it will ramp. One analyst suggested it will not make material contributions to the company’s top line until the second half of 2021. Executives said earlier this year that “dozens” of customers had started using the payment module, but they did not provide an update in Q2. COUP’s main competition for its procurement software is SAP’s Ariba, but Coupa Pay may have a more difficult obstacle than any single competitor: dislodging the myriad payment systems that enterprises have set up through their ERPs. COUP’s challenge may be even more daunting when considering that its platform only deals with indirect spending, so companies that use Coupa Pay will still have to maintain a separate payment system for direct spending. If COUP is successful in getting companies to use Coupa Pay, its take rate will be significantly affected by whether companies use ACH bank pulls for payments or virtual credit cards, as the latter could be more lucrative for COUP.
  4. Blueshift’s July 2 report said COUP has a great platform for managing business spending and should continue to build traction as more enterprises become aware of its value. COUP’s platform provides quick returns with increased efficiency in the procurement process, better visibility into spending patterns and improved compliance with purchasing policies. Five sources said Coupa Pay seems promising.


When and how quickly will Coupa Pay start to ramp? Can COUP entice enterprises to use Coupa Pay or is it destined to be a niche tool for small businesses? Does Coupa Pay have any appeal for a company with an established ERP?  How complex is it for a company to move from an ERP-based payment system to Coupa Pay? For those who use Coupa Pay, what will be the split between ACH payments and more lucrative credit card transactions? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: Accounts payable executives, System integrators and resellers, and Industry specialists.  


Companies: Coupa Software Inc. (COUP), Barclays plc (BCS), Citigroup Inc. (C), JPMorgan Chase & Co. (JPM), SAP AG (SAP)


Research Begins: October 28, 2019


To see other ideas Blueshift Research is currently working on, please click here.



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