GOING PUBLIC

What You Can Learn From Coupons.com's Long Road to Going Public

Coupons.com had one of the strongest IPOs in recent history, doubling its stock price on the first day. It waited 15 years.
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Sometimes good things are worth waiting for.

And you could say that for Coupons.com, which went public today after 15 years of operating as a private company. The Mountain View, Calif.-company started out in the old dot com world, where it toiled away quietly, only to go public in the Web 2.0 world where it's core product, digital coupons, met with strong investor excitement, if not a frenzy.

It's a lesson to small business owners to focus on building lasting value, and not to jump on every promising ship that passes by. In the first two months of 2014, there were 42 initial public offerings, more than double the number of offerings during the same period in 2013, the Wall Street Journal reported Thursday, citing data from Dealogic.

Coupons.com, which listed its expected share price at $16 on Thursday, saw its stock nearly double in value, closing at $30, despite larger market trends that saw the Dow Jones Industrials and S&P 500 waver between gains and losses. Coupons.com, which digitized the moribund coupon-clipping world in the 1990s, raised $168 million, far surpassing its stated goal of raising $100 million.

A long way to go

On its public filing documents, submitted to the Securities and Exchange Commission in January, Coupons.com reported a net loss of $12 million for the nine months ended September 30, 2013, a decrease of nearly 75 percent for the same period in 2012. For the full year 2012, it reported a loss of $59 million, a 98 percent increase compared to the full year 2011.

It also listed $170 million in liabilities, about what it grossed through the IPO. 

The company's losses come on top of revenue of $115 million for the first nine months of 2013, about double the revenue for the same period a year earlier. For the full year 2012, Coupons.com reported revenue of $112 million, an increase of 23 percent compared to same period a year earlier. 

Steven Boal, Coupons.com's founder and chief executive officer, was unavailable to comment by deadline today. In an interview with Inc. Magazine in 2012, Boal talked about Coupons.com's importance as a disruptor.

"What we have done over 14 long years is we have taken a technology that has existed offline, and we have assisted moving it into the modern age," Boal said.

Risks of a flame-out

Still, among the risk factors noted in the company's public filing documents are the company's losses, which it says will likely increase as Coupons.com invests in sales and marketing, research, infrastructure, acquisitions, and expansions into new markets.

Swagbucks.com, a partner of Coupons.com which offers customer rewards for spending with coupons, says it is bullish on the discount market and thinks there's still a huge opportunity for consumer deal companies.

"Coupons have been an accepted part of retail culture forever," says Scott Dudelson, chief operating officer of Swagbucks.com, who adds that consumers searching for discounts in the digital world have become even more entrenched since the recession.

Self-funded through revenue since 2007, however, Dudelson claims Swagbucks.com is profitable and not necessarily interested in a flashy IPO exit.

Last updated: Mar 7, 2014

JEREMY QUITTNER | Staff Writer | Staff Writer, Inc. and Inc.com

Jeremy Quittner is a staff writer for Inc. magazine and Inc.com. He previously covered technology for American Banker and entrepreneurship for BusinessWeek.




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