As companies everywhere embrace automation to streamline processes, UiPath is paving the way. This company, launched in Bucharest in 2005, aims to create the best possible robotic process automation (RPA) software. CEO Daniel Dines speaks of wanting “a robot for every person” as part of his mission for the company.
UiPath is preparing for a direct listing, a different means of taking the company public than a traditional IPO. Direct listings enable companies’ employees and shareholders to sell existing shares of its common stock to new investors, rather than offering new shares.
TL;DR
- UiPath started in 2005 under the name DeskOver in Bucharest, Romania. The company’s original function was to build automation scripts.
- In 2012, the company shifted focus to robotic process automation, or RPA.
- In 2013, they launched their Desktop Automation program.
- The company incorporated in the United States in 2015. At the same time, they rebranded to UiPath.
- UiPath fundraising began in earnest in 2015 with an initial seed round, and continued to expand into new markets and products as it raised more capital. By mid-2020, the company’s annualized revenue reached $400 million, up from $100 million two years prior to that.
- In late January of 2021, UiPath announced it had filed confidentially to go public, noting it had raised $750 million to result in a $35 billion valuation.
- The company added six new board members in recent months, including CEO of DocuSign Dan Springer, who has experience in overseeing the IPO process. UiPath plans to go public via a direct listing, a streamlined and less-costly strategy than a traditional IPO.
A quick UIPath company history
UiPath has been around in some form since 2005, although the company pivoted significantly in the ensuing years. When started in Bucharest, Romania, they only employed 10 people and focused on outsourcing automation libraries and software to companies.
They began focusing primarily on RPA in 2012. Three years later, they changed their name from DeskOver to UiPath and incorporated in America. In 2015, the company launched UiPath Academy with free courses to train new developers in RPA.
RPA exists to allow robots, or software, to imitate and integrate the actions of humans. UiPath says its RPA robots “capture data and manipulate applications just like humans do.” Some of the tasks its robots perform include logging into applications, moving files, copying and pasting data, completing forms, scraping browsers, and much more.
UiPath says its robotic processes are non-intrusive and highly scalable to any business. Delegating processes to RPA can streamline the workflow for an organization.
“It will allow for superior scalability and flexibility within the enterprise, doubled by fast, tailored response to specific needs.” – UiPath
UiPath has won numerous accolades and distinctions for its success in the automation sector and as a respectable employer. Here’s a look at some of the recognition the company has received:
- 2017: The Everest Group’s “RPA Technology Leader and Star Performer”
- 2018: Forrester Wave, #1 in RPA
- 2018: Forbes #14 in Cloud 100
- 2019: #1 on Deloitte’s Technology Fast 500 list
- 2020: Forbes AI 50 (only RPA provider on that list)
- 2020: Forbes #3 in Cloud 100
- 2020: CNBC Disruptor 50 (one of three B2B software companies on that list)
By 2019, the company had received multiple Comparably awards such as Best Place to Work, Happiest Employees, and Best Company for Women. By mid-2020, UiPath had reached $400 million in annualized revenue, compared to $100 million in 2018.
UiPath fundraising to know about
Since 2015, UiPath has benefited from fundraising from a wide range of early-stage and later-stage investors and venture capital firms. Some of their key investors include IVP, Dragoneer, Coatue Management LLC, CapitalG, and Accel.
Here’s a rundown of some pivotal funding rounds for UiPath:
- Seed Round: In 2015, UiPath conducted its first seed round of funding from investors Credo Ventures, Seedcamp, and Earlybird Venture Capital.
- Series A: Accel led an investment totaling $30 million in 2017. Previous investors participating in this round were Seedcamp, Credo Ventures, and Earlybird Venture Capital.
- Series B: In 2018, UiPath raised $153 million in new funding led by Accel, with new investors CapitalG and Kleiner Perkins contributing. The company surpassed a $1.1 billion valuation.
- Series C: This next round of fundraising, also in 2018, was led by CapitalG and Sequoia Capital and totaled $265 million. UiPath’s new valuation at this point was $3 billion. Other investors were IVP, Meritech Capital, and Madrona Venture Group.
- Series D: UiPath’s 2019 Series D fundraising round raised $568 million. Led by Coatue with participation from Dragoneer, Wellington, and Sands Capital as well as several existing investors, the new post-money valuation was $7 billion.
- Series E: In 2020, the company raised $225 million in a Series E round. Led by Alkeon and including investments from Accel, Coatue, Dragoneer, IVP, and others, this round brought UiPath to a massive $10.2 billion valuation.
- Series F: In February 2021, UiPath announced it had closed on a $750 million fundraising round that gave the company a post-money valuation of $35 billion. Leaders in this round were previous investors Coatue Management and Alkeon Capital.
Path to the UiPath IPO
UiPath is pursuing a direct listing to take its shares public, which differs from a traditional IPO in several important aspects. The primary difference between traditional IPOs and direct listings is that a direct listing sells existing stocks, while the IPO issues new shares.
The company has been able to observe several other major companies going public through direct listings over the past several years. Spotify used a direct listing in 2018, Slack followed suit in 2019, and both Palantir and Asana are counted among the companies that went public via direct listings in 2020.
Why might a company elect to use a direct listing rather than a traditional IPO? Here are a few of the pros of a direct listing:
- Offers liquidity to existing shareholders by enabling them to sell shares on the market
- Lower cost than a traditional IPO (avoiding fees paid to investment banks, plus avoiding indirect cost of discounting shares)
- A quicker path to IPO when not seeking to raise capital
On the other hand, not all companies would want a direct listing. Here are some of the cons associated with direct listings:
- Often more volatility at first due to lack of underwriters
- Stock price depends on whether current shareholders or employees want to sell
- Range of stock price is unpredictable because it’s based on supply and demand rather than a fixed number of available shares
UiPath submitted their draft registration with the SEC in December 2020, but they did so on a confidential basis.
Related: Direct listings vs. IPOs
When is the UiPath IPO date?
Since the company filed confidentially in December 2020 with its intentions of going public, it looks like the UiPath IPO isn’t too far into the future. TechCrunch reported that in July 2020, during the fundraising round led by Alkeon Capital, CEO Daniel Dines hinted at an IPO to come.
Dines noted he didn’t have a specific IPO date in mind at that point. He said “We’re really in the mindset that says we should be prepared when the market is ready, and I wouldn’t be surprised if that’s in the next 12-18 months.” Benzinga recently speculated that the IPO could be completed within the first half of 2021, based on that information and the confidential filing.
What investors should know about the UiPath IPO
UiPath has been on a steady route of growth over the years, and the recent addition of half a dozen new members onto its board of directors may indicate a commitment to continued growth even after the direct listing is complete.
They aim to help other companies become as efficient as possible by eliminating unnecessary tasks and outsourcing repetitive tasks to digital robotic technology. As artificial intelligence (AI) is poised for massive reach, UiPath is ready to reap the rewards.
Grand View Research projected the global AI market to be worth $39.9 billion in 2019. In addition, from 2020 to 2027, they said the anticipated compound annual growth rate would be 42.2%. This estimate may even be a little on the conservative side.
Pursuing a direct listing rather than a traditional IPO means that the UiPath IPO won’t give a discount to any investors. The direct listing doesn’t require underwriters or a lock-up period like other IPOs. UiPath isn’t focused on raising new capital, so a direct listing makes sense.
UiPath has great potential in healthcare or any other sector that’s overwhelmed with paperwork and clerical data entry. Perhaps UiPath’s platform can help eliminate some of the costly administrative errors in the global market.
Related: How to invest in cutting-edge technology
Bottom line
UiPath is blazing its own trail to being a publicly traded company, although executives are keeping some of the details of the offering under wraps. Being one of the most valuable privately held tech companies at $35 billion, it will be exciting to see how the UiPath IPO plays out.
Benzinga noted that UiPath “deserves its heightened accolades” because its innovation could impact multiple enterprises with radical and positive changes. Its RPA technology takes on the repetitive, mundane tasks that many employees dread. Perhaps the UiPath IPO isn’t just an investment in AI. Maybe instead it’s an investment in the overall business standard.