Workiva? It sounds like the love child of Workday and Kiva Systems, but it is not. You have likely never heard of Workiva for three reasons:
- In July of this year it changed its name from Webfilings
- It is headquartered in Ames, Iowa, which is quite nice, but qualifies as “fly-over country” for most VC and PE firms, even for those based out of Chicago!
- It sells to the CFOs and GRC folks at Fortune 500 companies (in fact, it is now installed at 60% of those companies.)
I’m not going to provide a complete review of the prospectus, because I am getting tired of doing those, so I will just provide the highlights my warped mind found most interesting. (Heck, it’s a free blog.)
1. When I first read Workiva’s description of themselves, I was not impressed:
Workiva has pioneered a cloud-based and mobile-enabled platform for enterprises to collaboratively collect, manage, report and analyze critical business data in real-time. Our secure software platform, Wdesk, allows users to integrate and control all of their business data, regardless of format or location, with innovative live-linking technology. Our proprietary, integrated word processing, spreadsheet and presentation applications, built upon our data engine, allow thousands of users to collaborate simultaneously on data-linked reports and documents.
It sounded like Google Docs or Microsoft 365 on steroids. But as you dig into the company more, you learn that even if it is Google docs on steroids, it’s an attractive sounding offering positioned as a Governance, Risk and Compliance (GRC) application for finance. Building on Webfiling’s legacy of helping public companies meet SEC filing requirements, Workiva has built a “single source of truth” platform for all sorts of filings, presentations, and other compliance related documents. Very smart.
It’s a dirty little secret that CFOs hate spending money–except when it comes to their own systems!! What CFO does not live in fear of a mistake in consolidation in Excel spreadsheets or in an investor presentation? And if you can sell to CFOs based on fear, you can build a great company. Just ask SAP! CFOs and GRC folks love the “single source of truth” or “system of record” concept.
2. The article this week that a spreadsheet error by Goldman Sachs meant a $100 million change to the valuation of Tibco probably helped sell a lot of product!
3. Workiva’s rise has been rapid. Check out this timeline from the company’s website:
The company finished the latest 12 months with over $100 million in revenue and losses of $31 million. Other than during the bubble era, you don’t see a lot of B2B companies go from $0 to $100 million in revenue is six years. Veeva did it, and Hubspot may do it, but many take a few years longer, if they make it at all.
4. Workiva’s prospectus provided a cohort analysis for the customers they added in 2011, their first big year. The numbers were impressive. They did not provide any analysis for the 2012 class, however. For me, providing this kind of analysis has become a litmus test in looking at SaaS enterprise offerings.
5. Workiva is the first company I have seen go public on the Google Cloud Platform. I’m sure there are more, but it still stood out.
6. As you’d expect, Workiva is spending like crazy on R&D and sales and marketing.
I’m not an expert in the GRC space, but it would not surprise me to see one of the big players try to short-circuit the IPO process and acquire these guys. Workiva seems like a great fit. (If I were one of the big GRC players, I’d be rooting for continuing volatility and perhaps a downdraft in the market to keep these guys from going public. Though that seems unlikely. After all, Hubspot debuted last week and has held up just fine.)
IBM, Oracle, and SAP used to have the oligopoly on the “fear factor” sale, which is a great motivator. Maybe Workiva has found a little spot in that world for themselves.