Truth Less Strange Than Fiction Edition: Coupa, Amex/SMBs And IoT Cybercrime

Most people know the expression “truth is stranger than fiction,” though a smaller number know that it comes via American quote factory Mark Twain. An even small number then that know the quote has a second half: “but it is because Fiction is obliged to stick to possibilities; Truth isn’t.”

A sentiment which is brought to mind by most of what we’ve been observing via the regular news cycle these last few weeks.

Which is why so many sought comfort in payments and commerce land last week, sort of. Coupa pulled off one of the bigger IPOs of the year, despite having no profits or any immediate plans to become profitable, Amex leaned into SMB lending via QuickBooks and hackers found ways to turn our smart appliances against us.

Ready to learn more?

 

Coupa Kills It On The Nasdaq

Wall Street watchers have had a rather sparse year on the IPO front, and a wide variety of system hiccups and shocks throughout 2016 saw lots of firms deciding to eschew big public offerings in 2016. It may be that 2017 shapes up to be more lively — Snapchat is already on the docket — but this year has seen startups stick with VC funding rather than risk public offerings, even with private equity slowing down dramatically in the last 12 months.

Which meant that Coupa’s billion-dollar day one on the Nasdaq has caught an awful lot of attention — even if Coupa itself is probably never quite going to be a household name.

The first of several B2B FinTech firms looking to float an IPO in the coming weeks, Coupa priced its shares at $18 for initial trading, saw its value spike all the way up to $41 and close at $33.28.

That puts its opening market cap at $1.66 billion, reports said.

Coupa is officially a billion-dollar company, despite acknowledging that it has yet to turn a profit — and may not anytime soon.

Coupa CEO Rob Bernshteyn said that many of its clients are familiar with services, like Salesforce, to drive revenue through sales.

“We’re on the other side of that equation,” he said. “We’re helping them spend more efficiently.”

“The CFO understands that this is not a matter of spend management but rather a matter of managing one of the biggest line items on the corporate P&L,” noted Jonathan Ebinger, BlueRun Ventures general partner, in another interview. BlueRun was one of Coupa’s first investors, reports said.

According to Bernshteyn, Coupa initially sought an IPO in an effort to increase visibility amid a trove of big-name competitors, like SAP and Oracle. He also believes that lack of profitability is not a major issue as the firm is growing incredibly quickly.

“For every dollar we burned, we created well over a dollar in recurring revenue,” he said, adding that he’ll be looking to “build this business for the long term.”

Coupa confirmed months-long rumors of IPO plans with its filing last month. Since, analysts have theorized that Coupa is ready to go on an M&A spree after the float to build up its market value and integrate other firms’ solutions into its platform.

Some of of those solutions may even find a way to make the firm money, though that is admittedly a rather old-fashioned concern.

 

Amex, QuickBooks And A Better Lending Base For Small Business

American Express is historically associated with two rather exclusive and high-spending groups: affluent consumers and very large enterprises. As American Express’ marketing was fond of noting, membership has benefits, and membership is for a select few.

But that was the old American Express. The new American Express realizes, if it wants to be a major competitor, it needs more customers, which means it is working hard to bring the benefits of membership to a larger group.

On the consumer side, there are some very public and visible signs of that — a favorite being the line of television ads starring Tina Fey as she uses her American Express for normal(ish) activities, like buying groceries or getting a better meal while sitting in coach.

On the B2B back end, things are a bit less publicly advertised but every bit as active, as Amex is working hard to court the small business consumer into its commercial card family.

American Express has teamed up with QuickBooks to provide joint SME clients with financing for supplier payments.

Through their collaboration, American Express will integrate its Working Capital Terms solution into QuickBooks Online for small businesses that are already using American Express OPEN Business commercial cards. Amex will provide short-term financing for small businesses to pay suppliers and manage cash flow, the companies said.

“We’ve heard time and again from small business customers that cash flow is a key area of concern when it comes to managing day-to-day business expenses,” said American Express Global Commercial Payments Executive Vice President of Global Product Management E-Bai Koo in a statement. “By embedding our Working Capital Terms’ digital loans directly into QuickBooks, we make financing available to our customers when and where they need it most to pay vendors, simplifying the payments process and reducing time spent reconciling accounts.”

In addition to providing a short-term loan, American Express Working Capital Terms offers users vendor management capabilities, payment consolidation, reconciliation services and other features to streamline B2B payments and accounting.

About a year ago, American Express announced a partnership with Intuit that allows small business users of the Amex OPEN Business Card solution to integrate data from their transactions on the card into the QuickBooks platform, and this move has been read as an expansion of that push.

And speaking of pushing…

 

Hackers Now Using IoT Devices To Test Their Ill-Gotten Informational Gains

Given the neverending proliferation of cyberattacks over the last decade, it probably should not come as much of a surprise that hackers have found a new and exciting way to turn DVRs, satellite antennas and networking devices against their owners. Finding ways to hack your stuff is, after all, what cybercriminals do.

And as it turns out, such devices offer an excellent place to do mass tests of stolen login credentials, according to research from Akamai Technologies Inc.

The report also confirms that hackers have apparently spent months at a time using millions of “smart” devices to see if stolen passwords are usable on more than one site. There is even a name for this type of hacking: “credential stuffing campaigns.”

“Once malicious users access the web administration console of these devices, they can then compromise the device’s data and, in some cases, take over the machine,” Akamai researchers wrote in their report. They noted that the vulnerability isn’t new but has resurfaced with the proliferation of connected devices and said they are working with some of the biggest device vendors on “a proposed plan of mitigation.”

The news comes amid concerns that weaknesses in the factory settings of connected devices give hackers an easy tool by which to access websites illegally. Akamai’s research showed smart devices could be manipulated using secure shell protocol, better known as SSH. Most computers use this standard to handle login requests, even from devices outside a network firewall.

Akamai said it noted the issue when it saw thousands of login requests suddenly start pouring into customer sites. Akamai deduced that hackers were mass testing passwords for consumers to see which ones worked and could be resold as part of a credentials packet.

Did we mention that the prospect of being held hostage to one’s toaster is the ultimate truth stranger than fiction scenario?

 

So, what did we learn this week?

Progress marches on. After a slow year on the stock markets, Coupa managed to coup beaucoup bucks — we’re sorry, we waited all week on that pun — almost doubling its initial share price in its first day. Perhaps investors are a little IPO starved, which may bode well for also unprofitable Snapchat in six months.

American Express is pushing forward to be the card for everyone — and every business.

And hackers are, well, hacking all of our stuff, which doesn’t feel like progress on our side and denotes the need for ever better work from the white hats so cybercriminals don’t turn our washing machines against us.

But even if that happened, it would still be more normal than the rest of the news cycle.

Have a good week.