Hyperscience has laid off 100 employees -- or roughly 25 percent of the automation software company's staff, according to The Information. Moreover, Hyperscience Co-founder and CEO Peter Brodsky has stepped down, the report indicated.
The Hyperscience layoffs offer a cautionary tale for IT consulting firms and MSPs that are diving into the software automation market and related areas such as Robotic Process Automation (RPA).
Hyperscience Growth, Partnerships and Missteps
Instead of competing head-on against RPA tools, Hyperscience's machine learning software works alongside PRA to help channel partners and end-customers automate document processing.
Anecdotal evidence suggested that Hyperscience, based in New York, was in rapid growth at least through 2021. Indeed, Hyperscience's revenue grew nearly 1,000 percent over a three year window, according to the Inc. 5000 report for 2021.
The company in December 2021 raised $100 million in Series E funding led by Global Founders Capital, Tiger, Stripes, and Bessemer. Around the same time, Hyperscience acquired Boxplot, a graph data modeling software startup that "enables organizations to visualize and better understand their customers’ data and explore how it relates to other data across their organization," the buyer said at the time.
Still, Hyperscience made some missteps, according to The Information. Among the errors: Making a hiring blitz in sales and marketing even as its software wasn’t resonating with customers as well as it had hoped, the report indicated.
RPA Software: Market Forecast
Despite the setbacks at Hyperscience, the overall automation software market appears strong and growth in the RPA software segment also appears strong. Indeed, the global robotic process automation market is expected to reach $10.7 billion by 2027, expanding at a CAGR (compound annual growth rate) of 33.6% from 2020 to 2027, according to Grand View Research Inc.
Amid the RPA market growth, multiple companies are acquiring RPA software providers and associated RPA consulting skills.
Even IBM is jumping into the action, as part of IBM CEO Arvind Krishna’s M&A effort to pivot the enterprise technology provider toward multi-cloud software that drives business automation.
RPA Software: MSP Opportunities
Among the latest moves: Rewst hired ConnectWise and Perch Security veteran Wes Spencer as president in February 2022. Earlier, Rewst raised $3.5 million from Florida Funders in November 2021. Also, ElectroNeek in mid-29021 raised $20 million in Series A funding.
Elsewhere, Ingram Micro agreed to distribute UiPath’s RPA software worldwide, the two technology companies confirmed in May 2021.
Those milestones suggest automation software is catching on with MSPs. But those job cuts over at Hyperscience offer a timely reminder about business resets -- especially as Wall Street and Venture Capitalists carefully with valuations worldwide...
Disclosure: ChannelE2E Editorial Director Joe Panettieri is a member of Florida Funders.