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Billion Dollar Unicorns: Workday’s Ramp to Multi-Billion Valuation

Posted on Thursday, Jan 8th 2015

Continuing with the Billion Dollar Unicorn posts, here is another mega hit in the category: SaaS-based enterprise services provider for human resources, payroll and financial management, Workday (NYSE: WDAY).

Workday’s Financials

Workday was founded in 2005 by long-time friends and PeopleSoft alumni, Aneel Bhusri and Dave Duffield. The two met over brunch and decided that they wanted to start a company that offered cloud-based solutions for HR and Financial services. Dave was already a successful entrepreneur who had founded PeopleSoft and Aneel had worked at several leadership positions in PeopleSoft.

Soon, Workday was born with the mission of providing a fresh approach to today’s global businesses. Workday has successfully leveraged the cloud to provide their customers with a platform that delivers a complete view of the organization and provides insight into business events for faster decision-making. They help employees collaborate over multiple devices, use real-time data for decision-making, and deliver an intuitive user experience for effective resource management with minimal reliance on specialist information technology, human resources, or finance employees.

Since its founding, Workday has grown rapidly. Revenues have grown from $25.2 million in 2010 to $468.9 million for 2013. They ended the September quarter with revenues growing 68% to $215.1 million, surpassing analyst expectations of $205.3 million. Subscription revenues grew an impressive 75% to $164.4 million and Professional Services revenues increased 49% to $50.7 million.

The company still continues to report losses though. They ended fiscal 2013 with a loss of $0.54 per share. For the September quarter, losses came in at $0.10 per share compared with the Street’s forecast of a loss of $0.33 per share.

For the December ended quarter, Workday expects revenues of $219 million-$222 million compared with the Street’s forecast of $220 million.

Workday’s Product Expansion

Workday continues to grow their product offerings and recently introduced Workday Insight Applications, a new suite of applications that will leverage their advanced data science and machine learning algorithms to help their customers with improved decision-making systems. The application will be able to provide customers with insight into making more informed financial and workforce decisions. The application will be made available to the public starting this year.

They also introduced Composite Reporting as part of the latest release of Workday Financial Management. Composite Reporting is an advanced reporting tool that will cater to the reporting requirements of large organizations.

Workday went public in 2012. Prior to listing, they had received $175 million in venture funding from investors including Janus Capital Group, T. Rowe Price, Morgan Stanley, Bezos Expeditions, Dave Duffield, Greylock Partners, New Enterprise Associates, and IndoUS Venture Partners. They raised $637 million in their IPO and have seen valuations grow from $7.8 billion back in 2012 to nearly $15 billion this year. That is a rather high valuation for a company that is expected to end fiscal 2014 with with revenues close to $780 million. It did not take very long for Workday to reach the multi-billion dollar valuation group. Back in 2011, 6 years after being founded, they had raised $85 million in a funding round that valued them at $2 billion.

Their stock is trading at $79.42 with a market capitalization of $14.9 billion. It touched a 52-week high of $116.47 in March last year.

According to a MarketAnalysis report, the global HR software market is expected to grow 2.4% annually over the period 2015 through 2020 to be worth $9.2 billion. The growth is projected to be primarily driven by increased adoption of SaaS-based delivery models. Workday is positioned well in this market. They have already attracted big customers to their services and recently saw PwC become the largest services partner for their products in Canada.

More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in the TechCrunch article by Aileen Lee of Cowboy Ventures.

This segment is a part in the series : Billion Dollar Unicorns


. How Marketo Is Faring In The Public Market
. Workday's Ramp to Multi-Billion Valuation
. Gaurav Dhillon, Founder of Informatica and SnapLogic (Part 1)
. ServiceNow's Expanding Market Opportunity
. Gaurav Dhillon, Founder of Informatica and SnapLogic (Part 2)
. Gaurav Dhillon, Founder of Informatica and SnapLogic (Part 3)
. Gaurav Dhillon, Founder of Informatica and SnapLogic (Part 4)
. Tableau's Valuation Increases to $6 Billion
. A Rare Media Venture Called Vice
. Gaurav Dhillon, Founder of Informatica and SnapLogic (Part 5)
. Gaurav Dhillon, Founder of Informatica and SnapLogic (Part 6)
. Gaurav Dhillon, Founder of Informatica and SnapLogic (Part 7)
. Will Box Implode Post IPO?
. Net-a-Porter Cracks The Luxury Fashion Market
. Outbrain Prepares for an IPO
. Palantir's Skyrocketing Valuation May Be Justified
. Online Education Player Lynda.com
. Pluralsight's Impressive Rise
. Snapchat Explores Revenue Generating Options
. Analysts Project Revenue for Pinterest
. The Market Awaits Etsy's IPO
. Taboola's Content Marketing Growth
. Egnyte Eyes IPO in 18 Months
. Web 3.0 and E-Commerce Investment Thesis of 3 VCs
. Cleversafe's Unique IP Strategy
. Cloud Investment Thesis of 5 VCs
. GoDaddy Shying Away from IPO, Yet Again
. Can Square Sustain Its Valuation?
. Zulily Tumbles
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. Bootstrap First, Raise Money Later
. ShopClues in India Shows Unicorn Characteristics
. What Have You Learned?
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. Adyen Bootstraps to Multi-Billion Valuations
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. AppNexus In The IPO 2015 Pipeline
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. MapR Readies IPO
. Lookout Getting Ready for an IPO
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. Blue Apron Simplifies DIY Gourmet Cooking
. GoFundMe Bootstraps till the Half-Way Point
. Containers Gives Docker Entry into the Club
. Can Kaltura Be A Public Unicorn?
. The Ride-Sharing Industry Continues to Deliver Unjustifiable Valuations
. MarkLogic Making Waves in Enterprise NoSQL
. CloudFlare Offers Website Security over the Cloud
. Mixpanel Provides Advanced Analytics for SMBs
. Spotify Gearing up to Face Apple Music
. Auction.com in Expansion Mode
. Nutanix Gives VMWare Tough Competition
. Houzz Bootstraps in a Niche Space to Join the Club
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. Coinbase Tries To Capitalize on BitCoins
. Expect Acquisitions From ServiceNow
. Zendesk and Freshdesk in Expansion Mode
. Zulily Attempts to Make a Turnaround
. Etsy Continues to Fumble
. Lufax May be Risky, But Valuations Remain Lofty
. Will IBM Acquire FireEye?
. Mode Media Takes on Video Streaming
. New Relic Moves Deeper into Enterprise
. Delivery Hero Gets Multi-Billion Dollar Valuation for Food Delivery
. Splunk Beefs Up Cyber Security
. Garena Secures Singapore's Entry to the Club
. Dianping is Thriving in China with its Local Reviews Business
. Box Struggles in its Public Avatar
. Coupang Raises the Banner for South Korea
. InsideSales.com Bootstraps First, Raises Money Later
. Pinterest Eyes E-Commerce
. Klarna Takes the Risk out of E-Commerce
. VNG Grows While Remaining Focused on Vietnam
. Good, Bad and Ugly
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. ZScaler Takes Security to the Cloud
. Bullhorn is in the Making
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. Evernote Trying to Recover Lost Ground
. Modernizing Medicine Is A Prospect
. Instacart Looks Shaky
. Mogujie's E-Commerce Pivot Pays Off
. Zalando Takes the Lead in European Etail
. BlaBlaCar Expands Internationally with Acquisitions
. Square Files for IPO Below Last Round of Financing
. Secretive Infinidat Makes its Way to the Club
. FanDuel Creates a Billion Dollar Company out of Fantasy Sports
. Kabbage Latest Unicorn in Slowing Online Lending Sector
. Atlassian Now Prepping for a US Listing
. Match.com Looking to Court the Stock Market Now
. Ele.Me Shows Online-2-Offline Works
. Alteryx is a Prospect
. Machine Zone Translates Multi-Player Games to Multi-Billion Valuation
. ZocDoc Should Be Able To Withstand Public Market Scrutiny
. Thumbtack Joins the Ranks
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. Online Lender SoFi Puts Off IPO Plans
. Warby Parker Joins the Club
. DraftKings Looks Worried as Fantasy Sports Come Under Scrutiny
. Tujia Offers Vacation Rentals in China
. Hortonworks Struggles to Stay in the Club
. Atlassian, A Legitimate One, Delivers A Great IPO
. Reconsider Your Aspirations
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. ForeScout Does Not Want To Go Public Yet
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. WeWork Riding the Sharing Economy Wave
. Moderna Therapeutics A Promising, Unproven Bet
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. Square Eyeing Large Sellers
. Airbnb Continues to Soar
. Xiaohongshu Leverages Social Commerce to Join the Club
. iCarbonX Wants to Create a Digital You
. Liepin, China's Homegrown Recruitment Platform
. Hike is the Latest Entrant from India
. Go-Jek Hails its Way into the Club
. Quanergy Rides Into the Club
. Aiwujiwu Rides High on Chinese Real Estate Sector
. Zeta Interactive Counts on Inorganic Growth
. Line Delivers a Successful IPO
. Grab from Singapore is the Next Big One
. Didi Chuxing Monopolizing Chinese Ride-Sharing Market?
. Blippar Bets on Its Visual Browser
. Two Years Post the IPO, Globant Continues to Soar
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. LeSports Cashes in on Niche Video Streaming
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. Russian Avito Gearing up to go Public
. Guazi Leading the Chinese Online Used Car Market
. Slack Delays IPO to Next Year
. Sprinklr Acquiring to take on Big Brands
. Infor Accumulates ERP Providers to Build an Empire
. Royole Corporation Flexes its Way into the Club
. Rong360.com Joins the Club
. Stripe’s Skyrocketing Valuation
. Hulu Gears up to Stream Cable
. Nutanix Delivers Upbeat Performance, Stock Still Down
. Procore Joins the Club
. JetSmarter Flies Into the Club
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. SimpliVity Exits in HPE's Arms
. Kendra Scott Shows that Women CAN Build Unicorns
. Zhihu Imitates Quora to Build a Valuation Without Revenue Company
. Putting Flipkart's Struggles in Perspective
. BlackLine Continues to Grow Post IPO
. Global Switch Wants to be Leader in Data Centers
. AppDynamics Sold Before IPO
. MuleSoft Delivers Successful IPO
. Alteryx has a Successful IPO
. Airbnb is in no Rush to IPO
. Actifio Focuses on Profitability, not IPO
. In Uptake, Groupon Founder Shows He Has Learnt His Lesson
. Will Cisco buy Nutanix?
. Zoom Video Communications Enters the Club
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. Stripe is in no Rush to List
. Cloudera Fails to Keep the Market Happy
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. Bill.com Has Scaled Quietly
. Toutiao Snags a Big Round, But Growth and Revenues Remain Tricky
. Taboola and Outbrain Exploring a Merger
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. Kuaishou to Focus on AI
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[…] has been delivering strong results on the basis of the continued product innovation. During the recent quarter, they announced their latest feature release Workday 24. Workday 24 will […]

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