Normally venture capitalists are paid to make these “bets” on behalf of limited partners, but now more corporations are making them for shareholders.
Workday began its big adventure into venture investing in July 2015. As the chart below shows, Workday investments grew from $10 million and after one year, reached $29 million. In the quarter ended July 31, 2015, Workday invested approximately $17 million in private companies.
Poof goes all the money. Workday’s Form 10-K for July 31, 2016, reported:
During the three months ended July 31, 2016, we recorded a $15 million other-than-temporary impairment for one of our cost method investments
Translated this means Workday wrote down and took a loss in it’s private company portfolio. The loss of $15 million was from just ONE investment and reduced the portfolio from $29 million to $14 million.
Since starting in 2015, Workday Ventures invested in five companies: Jobr, Metanautix, Thinair, Scoop Technologies, Unbabel. Exits were made from Jobr and Metanautix. Monster brought Jobr in June 2016 for $12.5 million and Microsoft acquired Metanautix in late 2015.
The table below tallies Workday’s exits and highlights a 1,000% return on a time gain of $3 million.
Wiped out are the gains earned in the past year. And now Workday is back where it started with a lot less cash. Maybe shareholders won’t care; it is not their money anyway.