Coupa Software launches $50 million venture capital fund

Business spend management (BSM) tool vendor Coupa Software has launched a venture capital fund to invest in technology startup firms, saying the $50 million fund will help extend digital transformation efforts to companies’ back office operations.

The “Coupa Ventures” unit is intended to foster innovation in the BSM sector by investing in early- and growth-stage companies breaking down inefficiencies in how businesses manage their spend, aligning processes and decisions across supply chain, procurement, and finance, the San Mateo, California-based firm said.

Coupa’s move comes after the company paid $1.5 billion in 2020 to acquire the supply chain software firm LlamaSoft and has since leveraged that company’s data to add depth to its Business Spend Index (BSI), a measure of corporate confidence in market conditions.

The company becomes the latest supply chain technology firm to launch its own venture capital arm, following Ryder System Inc.’s creation of a $50 million investment fund in 2020 and similar initiatives at Zebra Technologies, A.P. Moller-Maersk, and UPS Inc.

Coupa launched its own version with two startup firms already in its portfolio, including Zylo, a software-as-a-service (SaaS) management platform helping companies manage and optimize cloud-based applications, and SourceDay, which offers a supply chain performance solution that bridges the gap between a company’s enterprise resource planning (ERP) and its supply chain network.

“We're entering a new era of digital maturity within business, one that is marked by organizational agility, distributed and more autonomous users, and built-in intelligence,” Coupa CFO Todd Ford said in a release. “There is a massive opportunity right now to extend digital transformation efforts to the back office, as more companies recognize the power that spend has to transform their businesses and fuel their growth.”

One driver of the rising demand for digital transformation is the tumultuous business climate created by the pandemic, that has motivated companies to create more resilient, agile, and efficient practices, according to a blog post by JJ Freitag, Coupa’s senior vice president of Corporate Development and the managing director of Coupa Ventures.

Toward that end, Coupa Ventures intends to invest in companies focused on eight specific categories, Freitag said: AI and analytics; supply chain; office of CFO; IT spend optimization; B2B payments; data and application integration; workforce spend; and ESG, diversity and inclusion, supplier performance management.

We are thrilled to announce the launch of #CoupaVentures, a $50M fund to foster the next-gen of #businessspend management companies, and welcome our first two investments @getzylo & @SourceDay! Learn more here: https://t.co/5mWBkxA88m #BSM pic.twitter.com/cXCrJiIH3K

— Coupa Software (@Coupa) June 3, 2021