Even though a recession is looming (and venture investment has slowed) not everyone is doing badly. In fact, the tough times may benefit some companies, such as electronic procurement startup Coupa Software, which just raised $6 million in a second round of funding.
Foster City, Calif.-based Coupa may be one of the few companies that actually does better in the tough economic times ahead — as businesses tighten their belts, Coupa’s services will become even more useful. The startup’s software-as-a-service creates a “one stop shop” where employees can search for and purchase supplies. By centralizing and managing the procurement process, Coupa helps companies root out waste.
Battery Ventures led the round, and senior associate Brian O’Malley told VentureWire that his firm likes Coupa because its services would still be in demand during a possible recession. BlueRun Ventures also participated.
Coupa previously raised $1.5 million, which we covered here. (The amount was undisclosed at the time.)
Update: I just finished an interview with O’Malley, who elaborated on why he thinks Coupa is a good investment. And yes, the fact that it’s “almost counter-cyclical” — i.e., that it might do even better during a downturn — is a big factor. That’s something Battery’s investors have to think about when considering any new funding, or when they’re evaluating companies in the firm’s portfolio, O’Malley says. (With that same logic, Battery has been taking a close look at startups in the mortgage market, particularly those that can help homeowners refinance. The firm has yet to make any investments in this area, however.)
And Coupa really does save companies money, he says. For example, it serves biotech firms that have to make several expensive overnight shipments each day. With Coupa those companies can better manage the ordering process, and therefore consolidate each of those shipments into a single daily order.
There are some big players in this field, but that’s exactly what creates an opening for Coupa. Companies like Ariba only serve large customers, because installing their systems is expensive and difficult. Coupa, on the other hand, is much cheaper and easier to set-up — in part because it’s built on Ruby on Rails and Amazon web services — so it can serve companies with between 100 and 5,000 employees.
“There’s been so much built on the consumer shopping side, but there’s a big void on the business side,” O’Malley says.