Coupa Sales Continue To Grow But Firm Is Victim of CEO-Impersonator / Scammer

It has been an interesting couple of weeks for spend management software firm Coupa. Having launched a successful IPO last autumn, the firm released fourth-quarter and full year figures for 2016 on March 14th. They were very good as we’ll see later, but the edge was taken off that success by an embarrassing security breach.

A scammer managed to get someone from within the firm to send them by email W-2 forms (federal income tax related documents) for all employees – those tax forms include personal details such as name, address, salary earned for the year and so on (the equivalent we assume of the P60 in the UK).

We don’t know exactly how this happened, except that it involved the perpetrator pretending to be CEO of Coupa, Rob Bernshetyn. So, was it as simple as someone phoning up HR and saying “hi, its Rob here, I’m working at home today, I can't quite remember how much I pay my top team, can you please send the whole company’s W-2 files to me at robbiebigb0y27@gmail.com”?

Coupa says that it immediately alerted the FBI and the Internal Revenue Service to the breach. "We have not seen any evidence that any data has actually been misused," the company statement says. The firm has also offered employees two years of free identify-theft monitoring and insurance, but knowing how litigious Americans (or US lawyers anyway) tend to be, we can’t help wonder if staff might consider legal action against the firm.

The whole incident is a salutary warning to all firms, even if it sounds incredible really that it could be so easy. We’ll avoid making rude comments about the intelligence of HR people, but it might also make Coupa users ask a few questions about the security of their data. There is no real read-across that we can see between internal staff data and all the information about contracts, transactions and spend that sits in the client-facing platform, but nonetheless this incident might raise eyebrows.

Anyway, on the more positive side, the fourth-quarter results (up to Jan 31st 2017) announced for Coupa recently showed revenues of  $38 million, a 44% increase over Q4 2015/16.  Coupa continued to lose money, but the Q4 loss of $0.13 per share was much less than the $2.18-per-share loss recorded a year ago. So on a downward track, and break even by the end of 2017 certainly looks possible. Those figures contributed to a full year picture with sales up 60% year over year at $133.8 million. The full-year loss was $1.88 per share, versus $9.81 per share in 2015.

Big and recent client wins include Caterpillar, which really is a good name to have on your customer list. The figures were ahead of most analyst expectations, yet the share price responded with an immediate 10% or so decline – an indication that the market has very high expectations of the firm. Analysts pointed to the quarter-on-quarter growth rate slowing a little, inevitable really as you just cannot keep growing exponentially forever. The shares are around $25 as we write, still well above the flotation price last October of $18, but below the giddy heights of $30 plus hit on the first day of trading and again in late November.

The Coupa growth story has been hugely impressive, and still has plenty of mileage in it, but these are perhaps the first signs that there will be bumps in the road - every business faces some setbacks and issues along the way, and indeed how they are handled is often what drives long-term success.

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