For a privately held Silicon Valley-based startup, Coupons.com was old with a capital O. Founded in 1998, the company has built a name for itself as the online home for digital coupons to be used in physical stores. The 16-year-old startup went public on the New York Stock Exchange on Friday and saw its stock price jump 98 percent to $31.71 as of this writing. I caught up with CEO Steven Boal on Friday afternoon to discuss why now was finally the right time for a Coupons.com IPO and why the company’s approach to digital coupons is the right bet.
Re/code: By Silicon Valley standards, this IPO feels like a long time coming. Why now?
Boal: For me it feels like the right time and not a long time coming. Why now? We’ve been growing for 16 years and now we’re operating at scale and working with our large clients and retailers in a much more meaningful way. Bigger companies like the confidence of working with bigger companies and public companies. Institutionally, I think bigger companies don’t like working with smaller companies. … This gives them confidence that we are a long-term, financially healthy company.
We’ve seen a big price jump today in your stock. Was it priced right?
I think all the way around, the company is very happy. And I hope that our investors are very happy. I think everything was done very, very well.
We’ve seen players like RetailMeNot, Groupon and LivingSocial get into the space in different ways. Do you think your approach is the right one and, if so, why?
We all focus on different parts with very little overlap.
Right, you focus on digital coupons to be used in brick-and-mortar stores, correct?
That’s correct. Over 90 percent of all commerce still happens in physical stores. And when it comes to consumer packaged goods, it’s 99 percent of commerce. That said, our system is fully enabled for e-commerce. We are doing more business in mobility and pure digital. We have a small segment that competes with RetailMeNot and that’s only designed to support our offline specialty retail companies.
What do you get from the acquisition of Yub, which you bought this year?
Yub gives us direct linkage through the point of sale through MasterCard, Visa and American Express for specialty retailers. For 16 years, we’ve focused on the consumer packaged goods space, mostly through brand promotion. Now our platform allows retailers like the Gap to do e-commerce codes online and also offer in-store [coupons] using any credit card you want.
When do you think you will become sustainably profitable?
I think if you look at our sequential quarter, the last three quarters we were increasingly EBITDA positive. And in Q4 we actually had a net profit. Although 2014 is still going to be a year of investment, we plan to spend responsibly. Most of the investment has already been made.
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