Workday, a US-based provider of online human resource and finance software services backed by technology company Flextronics International, plans to raise $400m in its local flotation.
Investment banks Morgan Stanley and Goldman Sachs are serving as lead underwriters of Workday’s initial public offering on an undisclosed US stock exchange.
Workday posted a $46m net loss for the first six months of this year on $119.5m in revenue, compared to a $36m net loss on nearly $55m in revenue for the same period in 2011.
The company has raised about $265m, including its $98.6m series F round that closed at the end of last year at a reported $2bn valuation, while Flextronics holds a warrant to buy 1.35 million shares in the software company despite deciding against setting up a formal corporate venturing unit earlier this year.
Michael McNamara, chief executive of Flextronics, which has been a customer in Workday since 2008 and spent more than $5.5m with the supplier, is a director of Workday and owns shares and options in Workday.
The F round included fund managers Fidelity, T Rowe Price, Morgan Stanley Investment Management and Janus, as well as Bezos Expeditions, the personal investment entity of Jeff Bezos, founder and chief executive of online retailer Amazon.
Workday’s regulatory filing showed the company raised $75.7m in its E round by November 2009. News provider AllThingsD said Workday’s first four rounds raised $90m, although the regulatory records showed $70m in aggregate.
Its biggest outside shareholders are venture capital firms Greylock Partners, which owns 11%, and New Enterprise Associates (NEA) had 10.1%.
Aneel Bhusri, co-chief executive and chairman Workday, co-founded the company in 2005 and has been a partner at Greylock since 1999.
His other co-founder, David Duffield, is the other co-chief executive and his family investment trust is an investor – called limited partner – in Greylock’s 11th fund that closed at $1bn in April 2001, a year after its $510m previous fund closed.
Prior to Workday, Duffield founded PeopleSoft, a US-based enterprise software company, and was its chairman from its inception in 1987 until 2004 just before its hostile takeover by database company Oracle.
Many of the senior executive of Workday also previously ran PeopleSoft, including Bhusri; Michael Stankey, president and a former partner at Greylock; James Shaughnessy, general counsel; and Workday’s chief technology officer, senior vice-president of operations and vice-president of development.
After the PeopleSoft experience, Workday’s governance structure for the flotation is designed to prevent another hostile takeover – for a nice summery see news provider ZDNet.