Cloud-based human resources company Workday updated its S1 filing with the SEC with more detail about its planned IPO. The filing says Workday will offer 22,750,000 Class A shares at a price of between $21 and $24 a share. If the shares price at the high end of that range, Workday is looking at raising in the neighborhood of $545 million at a valuation of $3.85 billion.
Founded in 2005 by former PeopleSoft executives David Duffield and Aneel Bhusri, the company has been showing steady growth as more and more companies see the convenience and flexibility of cloud-based services. Workday had a net loss of $47 million on revenue of $119 million for the six months ending July 31. Total deferred revenue, the subscription revenue that is due to start flowing in, was $247 million for the same six-month period – a sign of growth to come.
Workday is hitting its stride in a market that is getting increasingly crowded with very large software players. Late last year, SAP bought rival Success Factors for $3.4 billion. In February, Oracle bought another cloud player, Taleofor almost $2 billion. This is where the revenge part comes in.
Duffield and Bhusri had built PeopleSoft into one of the most successful HR software companies on the planet. (Love it or hate it as a user, it was a huge winner.) Beyond its financial success, PeopleSoft had a culture that was all warm and fuzzy, it was a place people liked to work. Then Larry Ellison took a shine to the company. After a bitter campaign to fend Ellison and Oracle off, Oracle acquired PeopleSoft for $10 billion. Tears and teeth gnashing ensued as PeopleSoft was gutted. Duffield to this day, does not like to talk about Ellison, and once again it seems he will be competing directly against him.
As Oracles annual sales gathering kicked off Sunday, Ellison told the assembled faithful that everything Oracle offers would be made available in the cloud including, that’s right, PeopleSoft. Looks like Workday is going to really need that $545 million.
