UiPath, which helps businesses automate tedious digital processes such as billing and inventory control, announced today it raised $568 million from investors who agreed on a $7 billion valuation for the company.
New York-based UiPath is one of the automation software companies that have been raking in capital recently as they compete for enterprise customers looking to score cost savings and improve the efficiency of their operations.
UiPath’s big haul, in a Series D fundraising round led by Coatue Management, follows its $225 million Series C round in September, and brings its fundraising total to more than $1 billion.
In July, UiPath’s rival Automation Anywhere raised $250 million in a Series A funding round led by NEA and Goldman Sachs Growth Equity. Automation Anywhere then fattened up that Series A round in November by adding $300 million from the SoftBank Vision Fund. The extension round boosted the San Jose, CA-based company’s valuation to $2.6 billion, VentureBeat reported.
Automation Anywhere, founded in 2003, and UiPath, founded in 2005, are part of a market called robotic process automation (RPA) software, which is projected to reach $5 billion by 2024, according to a research report by Global Market Insights.
UiPath, which claims customers including Google, Autodesk, and McDonalds, says it has increased its annual recurring revenue from $8 million to more than $200 million since it closed its Series A funding round in April of 2017. Its workforce grew 16-fold to more than 2,500 employees during the same period, the company says.
Joining Coatue in UiPath’s Series D round were Dragoneer, Wellington, Sands Capital, and funds and accounts advised by T. Rowe Price Associates. Other participants included previous investors Accel, CapitalG, Sequoia Capital, IVP, and Madrona Venture Group.
Automation companies are deploying millions of “software robots” to take over boring, repetitive tasks now often performed by humans such as the back-office employees of their customers. These automation software companies are also producing bots that can learn from data patterns so they can refine their processes further.
But in this era of job security angst, questions inevitably arise: Will these bots undermine the job market for humans?
UiPath and Automation Anywhere answer in similar ways: The bots can relieve humans of rote work so they can focus on higher-order tasks.
“While no new technology comes without a certain level of disruption, RPA will allow employees to concentrate on their strengths—creativity, emotion, innovation—while handling the tasks that humans are not designed to do,’’ UiPath CMO Bobby Patrick says in an email response to Xconomy.
“In fact, we already have use cases of RPA improving productivity while enhancing jobs,” Patrick says. “For example, one of our clients in Japan, Sumitomo Mitsui Banking Corp. (SMBC), has saved more than one million-man hours (without a single forced layoff), and projects cost reductions of nearly $450 million (US) by 2020.’’
However, UiPath doesn’t keep track of the workforce impacts of its services on all the businesses whose tasks it automates.
UiPath’s customers come from a broad range of industries, including
finance, banking, insurance, healthcare, telecommunications, manufacturing, retail, and government agencies, the company says.
Some of the benefits of automating digital processes come from coping more quickly with the increasing demands of operating large-scale businesses across multiple global regions, UiPath explains on its website.
For example, UiPath points to the challenges for an unnamed auto manufacturing company with a global customer and supplier base. “It was especially challenged to maintain compliance with regulations that varied between countries,’’ the company says.
Consumers also expect rapid responses from large businesses in the digital age. For its customers in the financial sector, UiPath uses trained bots to scan for unusual patterns in bank account and credit card activity to prevent fraudulent transactions. The bots report the information to human fraud prevention analysts. They cut down on the time that must be spent by human workers; and in some processes, they can eliminate human involvement.
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