Nov
04
2019
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Workday to acquire online procurement platform Scout RFP for $540M

Workday announced this afternoon that it has entered into an agreement to acquire online procurement platform Scout RFP for $540 million. The company raised more than $60 million on a post valuation of $184.5 million, according to PitchBook data.

The acquisition builds on top of Workday’s existing procurement solutions, Workday Procurement and Workday Inventory, but Workday chief product product officer Petros Dermetzis wrote in a blog post announcing the deal that Scout gives the company a more complete solution for customers.

“With increased importance around the supplier as a strategic asset, the acquisition of Scout RFP will help accelerate Workday’s ability to deliver a comprehensive source-to-pay solution with a best-in-class strategic sourcing offering, elevating the office of procurement in strategic importance and transforming the procurement function,” he wrote.

Ray Wang, founder and principal analyst at Constellation Research says that Workday has been trying to be the end-to-end cloud back office player. He says, “One of their big gaps has been in procurement.”

Wang says that Workday has been investing with eye toward filling gaps in the product set for some time. In fact, Workday Ventures has been an investor in Scout RFP since 2018, and it’s also an official Workday partner.

“A lot of the Workday investments are in portfolio companies that are complimentary to Workday’s larger vision of the future of Cloud ERP. Today’s definition of ERP includes finance, HCM (human capital management), projects, procurement, supply chain and asset management,” Wang told TechCrunch.

As the Scout RFP founders stated in a blog post about today’s announcement, the two companies have worked well together and a deal made sense. “Working closely with the Workday team, we realized how similar our companies’ beliefs and values are. Both companies put user experience at the center of product focus and are committed to customer satisfaction, employee engagement and overall business impact. It was not surprising how easy it was to work together and how quickly we saw success partnering on go-to-market activities. From a culture standpoint, it just worked,” they wrote. A deal eventually came together as a result.

Scout RFP is a fairly substantial business, with 240 customers in 155 countries. There are 300,000 users on the platform, according to data supplied by the company. The company’s 160 employees will be moving to Workday when the deal closes, which is expected by the end of January, pending standard regulatory review.

Jul
29
2019
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The Exit: The acquisition charting Salesforce’s future

Before Tableau was the $15.7 billion key to Salesforce’s problems, it was a couple of founders arguing with a couple of venture capitalists over lunch about why its Series A valuation should be higher than $12 million pre-money.

Salesforce has generally been one to signify corporate strategy shifts through their acquisitions, so you can understand why the entire tech industry took notice when the cloud CRM giant announced its priciest acquisition ever last month.

The deal to acquire the Seattle-based data visualization powerhouse Tableau was substantial enough that Salesforce CEO Marc Benioff publicly announced it was turning Seattle into its second HQ. Tableau’s acquisition doesn’t just mean big things for Salesforce. With the deal taking place just days after Google announced it was paying $2.6 billion for Looker, the acquisition showcases just how intense the cloud wars are getting for the enterprise tech companies out to win it all.

The Exit is a new series at TechCrunch. It’s an exit interview of sorts with a VC who was in the right place at the right time but made the right call on an investment that paid off. [Have feedback? Shoot me an email at lucas@techcrunch.com]

Scott Sandell, a general partner at NEA (New Enterprise Associates) who has now been at the firm for 25 years, was one of those investors arguing with two of Tableau’s co-founders, Chris Stolte and Christian Chabot. Desperate to close the 2004 deal over their lunch meeting, he went on to agree to the Tableau founders’ demands of a higher $20 million valuation, though Sandell tells me it still feels like he got a pretty good deal.

NEA went on to invest further in subsequent rounds and went on to hold over 38% of the company at the time of its IPO in 2013 according to public financial docs.

I had a long chat with Sandell, who also invested in Salesforce, about the importance of the Tableau deal, his rise from associate to general partner at NEA, who he sees as the biggest challenger to Salesforce, and why he thinks scooter companies are “the worst business in the known universe.”

The interview has been edited for length and clarity. 


Lucas Matney: You’ve been at this investing thing for quite a while, but taking a trip down memory lane, how did you get into VC in the first place? 

Scott Sandell: The way I got into venture capital is a little bit of a circuitous route. I had an opportunity to get into venture capital coming out of Stanford Business School in 1992, but it wasn’t quite the right fit. And so I had an interest, but I didn’t have the right opportunity.

Jun
11
2018
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Workday acquires financial modelling startup Adaptive Insights for $1.55B

Workday, the cloud-based platform that offers HR and other back-office apps for businesses, is making an acquisition to expand its portfolio of services: It’s buying Adaptive Insights, a provider of cloud-based business planning and financial modelling tools, for $1.55 billion. The acquisition is notable because Adaptive Insights had filed for an IPO as recently as May 17.

Workday says that the $1.55 billion price tag includes “the assumption of approximately $150 million in unvested equity issued to Adaptive Insights employees” related to that IPO. This deal is expected to close in Q3 of this year.

IPO filings are known to sometimes trigger M&A. Most recently, PayPal announced it would acquire iZettle just after the latter filed to go public. Skype was acquired by Microsoft in 2011 while it was waiting to IPO after previous owner eBay said it would spin it off.

Workday itself went public in 2012 and currently has a market cap of nearly $27 billion.

The deal will give Workday another string to its bow, in its attempt to become the go-to place for all for back-office services for its business customers: the company plans to integrate Adaptive Insights’ tools into its existing platform.

“Adaptive Insights is an industry leader with its Business Planning Cloud platform, and together with Workday, we will help customers accelerate their finance transformation in the cloud,” said Aneel Bhusri, Co-Founder and CEO, Workday, in a statement. “I am excited to welcome the Adaptive Insights team to Workday and look forward to coming together to continue delivering industry-leading products that equip finance organizations to make even faster, better business decisions to adapt to change and to drive growth.”

The two have been working together as partners since 2015.

In the case of Adaptive Insights, which says it has ‘thousands’ of customers, its growth mirrors that both of cloud services and specifically about how business intelligence has developed into a distinct software category of its own over the years, with not just the CFO but an army of in-house analysts relying on analytics of a business’ data to help make small and big decisions.

“The market opportunity here is huge as the CFO has become a power player in the C-Suite,” CEO Tom Bogan told TechCrunch when it raised $75 million in 2015, when it first passed the billion-dollar mark for its valuation. Bogan previously also held a role as chairman of Citrix. “As a former CFO myself, I have seen this first hand and it is accelerating.” Other examples of this force includes Twitter’s Anthony Noto catapulting from CFO to COO (and is now a CEO running SoFi). Around 25 percent of CEOs at Fortune 500 companies are former CFOs.

Adaptive Insights had raised $175 million prior to this.

Bogan will stay on and lead the business and report directly to Bhusri.

“Joining forces with Workday accelerates our vision to drive holistic business planning and digital transformation for our customers,” said Bogan, in a separate statement. “Most importantly, both Adaptive Insights and Workday have an employee-first and customer-centric approach to developing enterprise software that will only increase the power of the combined companies.”

More generally, while we have certainly seen a much wider opening of the door for tech IPOs this year, there is also an argument to be made for continuing consolidation it enterprise IT, in particular with regards to cloud services that might have small or potentially negative margins.

Adaptive Insights was not immune to that: the company in its public listing filing said that its previous fiscal year brough tin $106.5 million in revenues, up 30 percent from the year before, but it also posted a loss of $42.7 million in the same period. That was narrower than the $59.1 million it posted in 2016. Combined with the bigger trend of all-in-one platforms packing a bigger punch with businesses, it might have meant that Workday’s offer was too compelling to refuse. 

This looks like Workday’s biggest acquisition yet, but the company has been on a spree of sorts: just last week it announced the acquisition of RallyTeam to beef up its machine learning.

Jun
08
2018
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Workday acquires Rallyteam to fuel machine learning efforts

Sometimes you acquire a company for the assets and sometimes you do it for the talent. Today Workday announced it was buying Rallyteam, a San Francisco startup that helps companies keep talented employees by matching them with more challenging opportunities in-house.

The companies did not share the purchase price or the number of Rallyteam employees who would be joining Workday .

In this case, Workday appears to be acquiring the talent. It wants to take the Rallyteam team and incorporate it into the company’s engineering unit to beef up its machine learning efforts, while taking advantage of the expertise it has built up over the years connecting employees with interesting internal projects.

“With Rallyteam, we gain incredible team members who created a talent mobility platform that uses machine learning to help companies better understand and optimize their workforces by matching a worker’s interests, skills and connections with relevant jobs, projects, tasks and people,” Workday’s Cristina Goldt wrote in a blog post announcing the acquisition.

Rallyteam, which was founded in 2013, and launched at TechCrunch Disrupt San Francisco in September 2014, helps employees find interesting internal projects that might otherwise get outsourced. “I knew there were opportunities that existed [internally] because as a manager, I was constantly outsourcing projects even though I knew there had to be people in the company that could solve this problem,” Rallyteam’s Huan Ho told TechCrunch’s Frederic Lardinois at the launch. Rallyteam was a service designed to solve this issue.

Last fall the company raised $8.6 million led by Norwest Ventures with participation from Storm Ventures, Cornerstone OnDemand and Wilson Sonsini.

Workday provides a SaaS platform for human resources and finance, so the Rallyteam approach fits nicely within the scope of the Workday business. This is the 10th acquisition for Workday and the second this year.

Chart: Crunchbase

Workday raised over $230 million before going public in 2012.

Aug
15
2016
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Workday gives IBM big win with seven-year cloud deal

IBM logo on server. Workday announced a 7-year cloud infrastructure deal with IBM Softlayer today to run their development and testing services on IBM’s cloud, handing IBM a huge win in the process.
The Wall Street Journal first reported the news.
It’s a big deal from a number of perspectives. First of all, it’s the size and scope of the deal, running seven years. Secondly, it’s a… Read More

Jul
14
2015
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Workday Launches Workday Ventures To Fund Machine Learning Startups

Woman counting piles of coins Workday, the 10 year old company that specializes in finance and human resources software in the cloud, announced a new program today called Workday Ventures, an investment arm focusing on startups with a machine learning bent. It intends to fund 10-12 companies this year with executives Dan Beck, senior vice president of technology products and Adeyemi ‘Ade’ Ajao, vice… Read More

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