Back in 2005, from an apartment in Romania’s capital Bucharest, a team of 10 ambitious software engineers set out to make their technological mark.
After a decade spent developing “software robots”, the start-up raised its first venture capital funding and began its global journey.
Today, from its headquarters in New York and more than 25 offices across the globe, UiPath has become the world’s leading provider of robotic process automation (RPA) software, with a customer base of more than 6,000 organisations.
RPA helps to streamline enterprise operations and reduce costs by automating repetitive mundane office tasks, enabling businesses to dedicate more time to higher-value work, such as interacting with customers.
UiPath’s expansion in clients and global footprint has been driven by rising demand for RPA software, and exemplifies how successful tech start-ups can become lucrative global businesses.
In 2019, RPA was the fastest growing segment of the global enterprise software market, according to technology research firm Gartner, helping UiPath to generate an annual recurring revenue of $360m.
It follows the software company’s success between 2015 and 2018, when its revenue grew at an average annual rate of more than 620%, according to a recent Financial Times ranking. UiPath was the second fastest-growing company in the Americas during the four-year period.
RPA’s capacity to drive efficiency, accuracy and improve customer experiences – without replacing existing legacy IT systems – has made it particularly attractive to organisations undergoing digital transformation.
“An organisation's propensity to use RPA is higher if they have a less sophisticated IT and business process architecture,” says Cathy Tornbohm, an analyst at Gartner.
Some of the largest adopters of RPA software include business process outsourcing (BPO) providers, banks, insurance companies and utilities, which have typically set up their technology systems over many years and rely on RPA to drive efficiency as they digitalise their operations.
As the coronavirus crisis forces organisations to work remotely and at a reduced capacity, the uptake of RPA software is set to accelerate, according to market research company Forrester, which claims the pandemic has redrawn the automation roadmap for companies.
“Discretionary spending for all technology projects will stall for two to four quarters… but after the multiple-quarter pause, we’ll see 18 to 24 months of rapid acceleration of industrial automation. Projects will substitute technology for labour, and RPA and UiPath will be winners,” says Craig Le Clair, vice president and principal analyst at Forrester Research.
“Robots and computers don’t get sick and can help with social distancing. Organisations with higher levels of automation maturity will see greater gains,” he adds.
The pandemic has created a lot of demand for UiPath’s software robots to assist hospitals with processing medical tests; helping public authorities provide welfare programmes, and supporting retailers onboarding new employees, UiPath’s co-founder and chief executive Daniel Dines told fDi.
“The global health crisis has shown us that the benefits of automation go beyond the return on investment and are societal in scope,” he added.
Given the breakneck speed of its revenue growth, it is little wonder that UiPath is among a coveted group of ‘unicorn’ companies valued above $1bn. The software company raised $568m of VC funding in April 2019, bringing its total funding to $920m and valuing it at a whopping $7bn.
As with many global technology companies, UiPath has kept its core engineering and support teams in key hub locations, while expanding customer-facing teams into new markets.
Building local teams, made up of sales, marketing and technology employees, has been central to UiPath's efforts to grow its customer base, says Mr Dines.
“We needed the most diverse pool of talent, something no single country could offer,” he adds.
Since 2016, UiPath has announced 36 greenfield FDI projects, setting up offices in cities across the Americas, Asia-Pacific, Europe and the Middle East, according to greenfield investment monitor fDi Markets.
The projects make the RPA vendor the second most active greenfield investor according to fDi’s inaugural Global Venture Capital FDI ranking.
“Gaining a global reputation for having a technology which solves similar problems which occur all over the world is very important,” says Ms Tornbohm.
“RPA vendors that expanded rapidly, either directly or via consultants, systems integrators and BPO companies, found they were able to seed more opportunities globally,” she adds.
UiPath’s rival RPA vendors have also ridden the automation wave across sectors, and expanded internationally.
Since 2014, UK-based Blue Prism and US-based Automation Anywhere, have announced 12 and 29 greenfield FDI projects, respectively, according to fDi Markets.
Blue Prism even bucked the FDI slowdown during the coronavirus crisis, announcing plans to set up an office in Cape Town, South Africa in March 2020.
In common with its competitors, UiPath attributes its success to more than just a global footprint.
While the buildup in direct sales teams in different markets has contributed to UiPath’s growth, it is “not the leading factor”, says Mr Le Clair, who says that the company’s success is attributable to it allowing customers to start small and get comfortable with its product and its familiarity with the “Microsoft environment”.
UiPath has also made several acquisitions to expand into new areas, such as Process Gold in October 2019, which operates in the related field of process mining.
Mr Le Clair says that given UiPath’s rapid expansion and acquisitions, “perhaps a more measured approach to growth will serve them in the long term”.
According to Dines, UiPath already has a significant global footprint, and is well-placed to serve customers around the world.
Whether UiPath will continue building presence in new markets on its rapid journey from start-up to global RPA leader is unclear.
Despite Mr Dines describing the years he and his team spent perfecting their software robots as “the worst time of his life”, while speaking at a Bucharest-based tech conference in 2018, it has clearly paid off and could yet reap more rewards from the shake-up that follows Covid-19.
Published in the June/July issue of fDi Magazine.
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