Workday Valued at $3.6 Billion in Latest IPO Filing
Workday, the fast-growing cloud-based human resources software outfit, updated its paperwork with the U.S. Securities and Exchange Commission, filing an updated S1 that gives more details into the initial public offering it has been working on all year.
The company now says it will offer 22,750,000 Class A shares at a price of between $21 and $24 a share. At the midpoint of that range, it should raise about $512 million, at a valuation of about $3.6 billion. It also said it will trade on the New York Stock Exchange under the ticker symbol WDAY.
The company is often described as “PeopleSoft in the cloud” mainly because its two and co-CEOs Aneel Bhusri and Dave Duffield both ran PeopleSoft during the period that software giant Oracle completed its hostile takeover of that company in 2005.
Bhusri and Duffield will collectively control about 67 percent of the shares, which should be worth about $2.4 billion. Greylock Partners, the venture capital fund where Bhusri is a partner, has a stake amounting to about 11 percent of equity. New Enterprise Associates has about 10 percent. COO Michael Stankey has a stake amounting to 2.5 percent.
And while it has reported about $120 million in revenue for the first six months of 2012 as of July 31, the real number to be watching — it is a cloud company, after all — is the deferred revenue number, an indicator of uptake in subscriptions to its service. As of July 31 it was $247 million.
The company’s valuation has nearly doubled in the last year since its $85 million institutional investment round, when it was valued at $2 billion.
The competitive landscape for Workday is also heating up. Oracle CEO Larry Ellison announced last night that all of its applications — including PeopleSoft — will now run on a software-as-a-service basis. Previously, it had been a traditional on-premise software product. Ellison likes to publicly beat up on Workday from time to time, which is widely considered to be more of a good thing for Workday than a bad thing. In an onstage interview at D:All Things Digital in June, Ellison said that Oracle “beats Workday all the time.” Ellison also said, “It’s going to be very interesting to monitor Workday.” And so it will.