Robotic process automation (RPA) software startup UiPath has raised $225 million in Series E funding and achieved a post-money valuation of $10.2 billion.
It's a relatively safe bet this is UiPath's final funding raise before pursuing a potential initial public offering (IPO).
RPA software allows partners and customers to automate manual business and technology processes. Within the IT services market, RPA may also help managed IT services providers (MSPs) to further automate their own help desks and customer support operations.
The new UiPath funding comes amid a feeding frenzy around RPA mergers, acquisitions and funding rounds. Other recent moves include:
- July 2020: Information Services Group (ISG) acquired Neuralify to offer RPA education services;
- July 2020: IBM acquired WDG Automation.
- May 2020: Microsoft acquired Softomotive to ensure all partners can “create bots to automate manual business processes.”
UiPath Funding: RPA Software Market Growth
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.
UiPath is riding -- and strongly influencing -- that growth wave. The company's annual recurring revenue is now $400 million, up from a $100 million annual run rate 24 months ago, UiPath says. More than 65 percent of Fortune 500 companies have used UiPath in some way, including eight of the top 10 companies.
Amid that UiPath growth, Alkeon Capital Management led the Series E funding in the software company. Others participating include Accel, Coatue, Dragoneer, IVP, Madrona Venture Group, Sequoia Capital, Tencent, Tiger Global, Wellington, and funds and accounts advised by T. Rowe Price Associates, Inc.
UiPath will use the money to "deepen its investment in research and development" -- which focuses on an "end-to-end hyperautomation platform" launched in May 2020.
UiPath Funding: Executive Perspectives
In a prepared statement about the Series E funding, UiPath CEO Daniel Dines said:
"This funding allows us to accelerate our platform ambitions to meet mounting customer demands and scale the tremendous opportunity to bring automation to one billion citizen developers – resulting in every business finally becoming a software business. We will advance our market-leading platform and will continue to deepen our investments in AI-powered innovation and expanded cloud offerings. COVID-19 has heightened the critical need of automation to address challenges and create value in days and weeks, not months and years. We are committed to working harder to help our customers evolve, transform, and succeed fast in the new normal."
Added Abhi Arun, general partner at Alkeon:
Automation, similar to cloud computing, has become a strategic imperative that is fundamentally changing the way organizations operate. UiPath’s leading-edge, mission critical product combines scalable software with an intuitive user interface enabling companies globally to accelerate their digital transformation efforts. UiPath is one of the fastest growing enterprise software companies in technology history and we’re excited to partner with them for years to come, as they deliver the most advanced and disruptive automation platforms of the modern enterprise.
Robotic Process Automation: MSP and Channel Opportunities, Challenges
Much of the RPA software market focuses on global 2000 enterprise accounts. But there are signs that RPA will increasingly extend down into midmarket and SMB opportunities. And the software may also catch on with MSP service desks.
UiPath, for instance, promotes its software as a way to automate IT help desk tasks:Video link
Still, the RPA market has also faced some challenges -- including some uneven growth during the coronavirus pandemic. Amid that reality, Automation Anywhere cut about 10 percent of its staff earlier this year.
Also, it's unclear if RPA software generates profits for software companies since many of the RPA providers are privately held.