On March 6, 2018, US-headquartered robotic process automation (RPA) platform vendor UiPath announced its latest round of Series B venture capital funding, led by Accel with two new investing partners: Kleiner Perkins Caufield & Byers (KPCB) and CapitalG (Google’s venture capital unit). This $153m funding puts UiPath’s valuation over the $1bn mark, making UiPath a “unicorn.” This funding significantly increases UiPath’s cash reserves, generating many options for pursuing acquisition, collaboration, and co-development opportunities with AI and different types of automation players, and strengthens its ability to forge ahead with intelligent automation (RPA enhanced with AI elements) while developing its ecosystem in the fast-growing RPA market.
UiPath’s first major round of venture capital funding (series A) in 2017 was led by venture capital firm Accel and included participation from seed investors Earlybird, Credo Ventures, and Seedcamp. The Series A funding totaled $30m; at over $150m the Series B funding represents a strong incremental jump from Series A to Series B. The high-pedigree investors engaged are bringing more than just funding to the table. Kleiner Perkins Caufield & Byers (KPCB) not only boasts many big-name success stories in Silicon Valley and beyond, such as Amazon, Twitter, and Google, but also many burgeoning enterprise platform providers such as Slack and DocuSign. CapitalG’s investment will be the thirtieth investment made by Google’s venture capital arm. The intention on Google’s part is to align this investment in UiPath to Google’s interests in the power of AI and automation. Accel lead partner, Rich Wong, will take a position on the Board of Directors at UiPath, complementing Tom Mendoza’s recent appointment from NetApp to the same board. In addition, partners from KPCB and CapitalG will join UiPath’s strategic advisory council. The richness of experience, contacts, networks, and context that these investing partners bring could prove extremely valuable to UiPath’s developing intelligent automation strategy. Furthermore, UiPath is likely to benefit from enhanced credibility by association.
This funding comes off the back of some encouraging growth indicators that UiPath provides. It is now a company of 590 people, having doubled its headcount over the previous three months, and is planning to grow further to 1,000 by the middle of 2018. The growth focus in terms of people is on the technical side for continued R&D, not just in sales. Sales is reinforced externally by partners (systems integrators, consultancies, and other IT services vendors) selling implementation services. UiPath’s annualized recurring revenue (ARR) has increased by more than a factor of eight, from $4.9m to $43m in FY 2017 (ending December 31), while its number of customers has increased sixfold to 778. UiPath has enjoyed considerable success in the financial services industry. Geographically, fast growth of UiPath’s flagship platform’s uptake in Japan stands out; investment in full Japanese language support has paid off, with some of UiPath’s biggest licenses and revenue numbers coming from SMBC bank and media company Dentsu.
Many big logos are already using UiPath’s platform: Chevron, Exxon, GE, HP Inc, Merck, Walmart, Wells-Fargo, NASA, UK Royal Mail, Wärtsilä, Avis, Credit Agricole, Caixa, Equifax, Prudential, Bosch, Huawei, and KPMG India. There are two types of growth plays here: new customers are being added at a rate of 2.5 per week, while existing customers continue to find more scope for robotics automation processing usage. Both growth factors contribute to the overall increases in key performance indicators (KPIs) above. What’s more promising still is the additional growth path of intelligent automation, using the recent AI developments in natural language processing (NLP) and image recognition to enhance the range and volume of semi-structured data that can be processed through RPA platforms in addition to structured data. UiPath better brace itself for a hectic few years – hypergrowth is hard. But this is where the newly formed networks with other start-ups and the possible collaboration opportunities with Google will impact UiPath’s ability to forge ahead by providing a support group of sorts, or a community of kindred spirits, to develop the next building blocks of automation.
Miriam Deasy, Senior Analyst, Advanced Digital Services