A peek at Workday's venture arm and three of its portfolio companies

Workday's near three-year-old venture arm may not get a lot of media attention but it's making solid progress. In a conversation with analysts, Leighanne Levensaler EVP of Corporate Strategy at Workday and Co-Head of Workday Ventures outlined the fund's ethos and investing strategy. Unsurprisingly, Ventures is aligned with Workday's inclusion commitments. According to Levensaler:  

First and foremost, we want to offer our customers complimentary solutions not competitive to what we do, but complementary that are designed to be integrated into the overall workday solution offering, whether it's just through a single sign-on or perhaps a more complex integration, but that it is adjacent and supportive of their overall experience that customers are trying to create for their Workday users.

The total fund stands at $250 million but that has not yet been expended. While the company didn't reveal the precise level of total investment, it pointed out that so far it has made 24 investments, typically in Series A and B rounds, with a handful of exits that include Duo, Integris, Voicea, and RedLock. ScoutRFP, was a Ventures investee before Workday acquired it just over a year ago in an all-cash deal valuing the company at $540 million. Sumo Logic, another investee company IPO'd in 2020. As expected, the bulk of Ventures investments have been in the HCM space. Surprisingly, Ventures has very little investment in financial management companies, only naming zimit, a firm that focuses on CPQ and forecast planning. Said Levensaler:

Work tech in general, because of COVID, even predating COVID, has been extraordinarily active, just in terms of the way it's tracked. If you look at the analysts that cover the venture capital space, work tech is a hot category.

Moving on, Workday introduced three portfolio companies, Tealbook in spend management, League in HCM and data.world in data and analytics. 

Three firms pitch

Tealbook is a company that specializes in centralizing and aggregating supplier intelligence for all stakeholders to create a universal supplier profile 'for every company in the world.' That's a big claim.Stephany Lapierre, CEO and founder expanded:

That helps our customers augment the information across 100% of their suppliers, to ultimately optimize their investment in technology software that is addressing the buy-side or the lifecycle of the suppliers, as well as optimize the entire supply base of the company. And so we have mostly fortune 500 customers, and we're growing our partnerships as we positioned ourselves as the supplier data foundation that powers the buy-side digital enterprise.

When the COVID-19 pandemic hit supply chains, Tealbook provided supplier lists for those impacted by the pandemic. 

A lot of them were either shifting their production to make PPE and had never sourced for PPE suppliers in the past, or were ensuring business continuity or looking to relocate their supply chain outside of China to other countries, or securing PPE that met the requirements to keep their employees safe...We knew that we had the technology, we had the data. And even though our customers spend millions of dollars on their technology stack, they were still not quite equipped to have the information to optimize their existing supplier base, let alone be able to find suppliers in the world that could ensure that they could stay in business and compete and ensure their employees' safety. 

Lapierre mentioned an interesting side effect of work-from-home, saying that Tealbook has helped buyers that don't have an opportunity to impact business decisions every day in the office by giving them visibility into supplier data so that they can make a bigger impact even beyond spend. 

Focusing on the technology problem Tealbook solves, Lapierre talked about the large enterprise where the data on thousands of suppliers is spread among multiple systems. The traditional way around this was to integrate across systems. Not only is that an expensive exercise, it is an ongoing effort. Even then, Tealbook reports that procurement leaders rarely have confidence in the quality of the data they have on suppliers.

In response to my question on this topic, Lapierre said that you can think of Tealbook as the master data record for your supplier base. I wonder how that squares with existing company held data because just as in sales, a supplier in a procurement system is not necessarily expressed in the same way as it is in say an accounting application, services application or GRN handling system. While the answer was not wholly clear, I suspect that internally, Tealbook customers start with an 'exceptions' view and use Tealbook to augment their procurement practices. 

Use cases are obvious and plentiful. Examples that spring to mind are compliance with corporate standards, removing the reliance on self-reported certifications, discovering suppliers in the context of diversity policies, and selection criteria arising out of those policies. 

It's really about having a deeper level of insight and using the information that's relevant to your business to respond to market changes, respond to the demands of the business, and have a much more agile and trusted partner to the organization. Ultimately, procurement should be set up as a strategic function that adds value through rich information.

League founder and CEO Michael Serbinis explained that his company uses technology to consumerize the health and benefits experience for employers, their employees and their families. Describing the service in a nutshell, which is aimed at the US market and has been certified for Workday since Spring 2020, Serbinis said:

We call our platform a health OS. It drives very high engagement, about 60 to 70% monthly active users, which is about 10 X the industry average. We leverage that along with a data-driven personalized approach that connects the right people to the right health and benefits at the right time. And those drive savings of about 500 to $1,000 per employee per year with better outcomes, and with an NPS of 80, much happier employees.

Serbinis pointed out that technology can save companies money while improving employee lives is because technology like League removes the difficulty of dealing with a market that is complex and difficult to navigate. He gave the example of an employee needing urgent care and not knowing what's available or where to find relevant and useful information.

We are that platform that sits in between your HCM, the myriad of programs, services, benefits and providers, and of course, your health plan or health plans. So we're the go-to, for all things health, how to access and pay for it. And it shows because we are driving that 60 to 70% MAU 10 X or better than you see in a typical enterprise. The platform generates a ton of data that we use in a real real-time of population health data to empower that end employee to drive better health outcomes and a better experience for them and their family.

League believes that apart from the more general idea of improving outcomes, its platform can help specific cases. The pandemic has exposed and exacerbated mental health issues among employees. Whether stress-related or from some other cause, League reports that as many as 30% of US companies are aware of the problem yet only a fraction, two to three percent, are in a position to help employees. Serbinis claims that using League technology can drive that small fraction up to 20%. Both the long and short term positive impact for both employers and employees is enormous

Preventaitve action is an interesting aspect of League's technology. Here, the company uses its dataset combined with machine learning to predict employees at risk of a condition and then using that as the basis for recommending taking preventative measures. This has implications for privacy but with data demonstrating that prevention is better than cure, both employers and employees will welcome this in the future. It is not so far removed from insurance companies offering discounts to premiums where the driver has a monitoring device in their car. Serbinis says that it can overcome the privacy issues by acting as a trusted advisor divorced from the employer, securely communicating with employees. Serbinis says that its methods are HIPAA compliant. While it cannot divulge individual data to anyone except to the individual, it aggregates data to provide trend and insight information.  

data.world claims that it " is home to the world’s largest collaborative data community, which is free and open to the public. It’s where people discover data, share analysis and team up on everything from social bot detection to award-winning data journalism." The company is distinguished by being a certified B Corporation which means that it is a business 

...that meet(s) the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose. B Corps are accelerating a global culture shift to redefine business success and build a more inclusive and sustainable economy.

Workday Ventures is proud of the fact that it has four B Corps in its portfolio as a demonstrable part of its commitment to transparency and equity. 

Key to data.world's data catalog offering is the idea of data governance across all data and metadata assets. As an example, Brett Hurt, VEO and founder data.world cited Associated Press, working in collaboration with the Washington Post, CNN, and the New Tork Times to ensure that journalists are getting the correct COVID-19 data that informs their stories. More broadly, data.world says that its catalog acts as a readily searchable repository for all data including that held in spreadsheets, a Big Data lake or Snowflake. 

data.world prides itself on having created what it claims is the world's largest open data community, saying that since the outbreak of COVID-19, it has become a go-to research resource for universities around the world. On that theme, Hurt said that the pandemic is driving an imperative for data to not only be organized but connected to the people who need it. Said Hurt:

We get to work a lot with the C suite at our customers, and they're trying to drive a large cultural change mandate to get people to be data driven.

data.world says that the real difference lies in its ability to help customers staff who are not technicians, data scientists or SQL jocks to use data in a meaningful way. 

Democratizing data matters and I think we do this very well for people who are very good at analyzing data when they have it but don't necessarily know how to get clean data. 

My take

It's noteworthy that all these examples focus on data that is both internally generated and is available from public sources. It is an area that interests me because when making decisions, the data a business holds never tells the full story. When internal and external data sources are married, it is much easier to understand the meaning within the context of the problem under review. 

Workday Ventures may be a minnow in the ventures world. Still, the examples showcased on this outing demonstrate the value of partnering with startups making a genuine difference in specialist fields that add value to customers' use of back-office solutions like Workday. I'd like to see more of these examples. They open up conversations with buyers on topics where there may be many possible solutions but where discovering the right solution in the context of a particular enterprise software landscape is problematic.