31st August 2012  Workday Files to Raise $400 Million.

Tech IPO fever continues even as Facebook (FB) shares fall below $19 on news that Workday has filed to raise $400 million.

Cloud-based HR and payroll software developer Workday was founded in 2005 by David Duffield, along with Aneel Bhusri, after his company PeopleSoft was bought out by Oracle Corporation (ORCL) in a bitter hostile takeover. Seven years later his new company has become a major competitor and has recently won a contract from Google Inc. (GOOG)

Over the last three years company revenue has grown 400% to $134.4 million and for the first six months of 2012 it has revenue of $119.5 million but Workday is yet to post a profit. Demand for cloud-based "software-as-a-service", which allows customers pay a subscription fee based on the number of users it has instead of installing and maintaining the software themselves, has increased dramatically and has led to big money takeovers. At the end of 2011 SAP Group (SAP) bought SuccessFactors for $3.4 Billion.

So far summer tech floats have had mixed results. Facebook shares don't seem to be able to find the floor, closing out Friday 31st at a new low of $18.06, down 5.4% in one day, in expectation that more holders of pre-IPO stock will sell big as another lock-up period ends. Shares have now fallen over 50% from their $38 May IPO price. Online-travel website Kayak (KYAK) jumped to $34 a week after it floated but has now pulled back to $27.29, $1.29 over its IPO. Network security providers Palo Alto Networks (PANW) are currently trading at $64.38, up from an offering price $42 making it one of the few success stories.

As yet Workday doesn't have any specific plans for the proceeds and plans to trade under the ticker WDAY but hasn't said what exchange it will trade on. Morgan Stanley (MS), who handled the Facebook, Kayak and Palo Alto deals will act as lead underwriter along with Goldman Sachs (GS).