UiPath, which is the leader in the RPA (Robotic Process Automation) market, has filed its S-1 with the Securities and Exchange Commission (SEC) this week. The deal is likely to be one of this year’s largest.
The founder and CEO of UiPath is Daniel Dines. In 2005, he launched the company in his home country, Romania. But the early years were challenging. His business was focused on integration and outsourcing, which had dismal margins.
By 2015, the business was on the verge of going bust. So he made a big gamble and refocused his efforts on the RPA market. The idea was to develop a platform that could make it easy to build bots to automate and streamline tedious processes.
What Dines realized was that there was a greenfield opportunity for growth. And he wasted little time on capitalizing on this. He would go on to invest heavily in innovating the platform, such as with AI (Artificial Intelligence), ML (Machine Learning) and process mining.
This is how the S-1 describes it: “Our platform is designed to transform the way humans work. We provide our customers with a robust set of capabilities to discover automation opportunities and build, manage, run, engage, measure, and govern automations across departments within an organization.”
The result is that UiPath has become one of the fastest-growing enterprise software companies, with revenues up 81% last year to $607.6 million. The dollar-based net retention rate also came to 145% and the customer base exceeded 6,000, which included 80% of the Fortune global 5000.
“UiPath has consistently invested in R&D and developing useful product features,” said Anthony Abbattista, who is the Principal and Advanced Analytics Enablement Leader at Deloitte Consulting LLP. “Even when they did cost cutting last year, R&D was kept on the front burner for investment. I also believe that UiPath has gained advantage because their suite has been built around an open architecture that allows third party and custom AI components to be easily integrated with their technology. This has given their customers and systems integrators a high degree of flexibility when architecting and delivering solutions.”
The IPO
No doubt, a big catalyst for growth has been the Covid-19 pandemic, as companies have had to find ways to deal with remote workforces as well as to handle surges in online transactions from customers. But there are also major secular changes at work.
Note that the market opportunity is definitely large. According to UiPath’s own analysis and data from IDC, it is estimated at over $60 billion.
“I expect UiPath to continue growing quickly,” said Sagi Eliyahu, who is the founder and CEO of Tonkean. “This is what happens when you bring automation into a place that didn’t have it before—it’s easy to maintain a status quo where businesses expect certain tasks will always be done manually, but UiPath, RPA, and automation vendors in general are unlocking automation in places that couldn’t integrate before. When more businesses see the power of that, they realize how much they need it. They are shining a light on an incredibly big market that's just being tapped into. Once businesses have manual tasks automated, they will look to start addressing complex processes, where there's even more value to be gained."
As for the UiPath IPO, the company plans to issue shares on the NYSE under the ticker of PATH and the lead underwriters include Morgan Stanley, J.P. Morgan, BofA Securities, Credit Suisse, Barclays and Wells Fargo Securities. The company is expected to raise well over $1 billion and the deal should hit the markets next month.
Tom (@ttaulli) is an advisor/board member to startups and the author of Artificial Intelligence Basics: A Non-Technical Introduction, The Robotic Process Automation Handbook: A Guide to Implementing RPA Systems and Implementing AI Systems: Transform Your Business in 6 Steps. He also has developed various online courses, such as for the COBOL and Python programming languages.
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UiPath IPO: What You Need To Know - Forbes
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