Automation software company UiPath is the latest unicorn to go public, and if its recent history is anything to go by, its first week on the New York Stock Exchange could be stellar.
UiPath made its debut on Wednesday with shares priced at $65.50, in what is apparently the third-largest software IPO in history, according to CNBC. The stock climbed as high as 23% above that initial price in the first day of trading, which itself was higher than the initially expected price range of $52 to $54. In the run-up to going public, UiPath reported that its 2020 revenue had increased 81% to a whopping $607.6 million. That, plus a recent funding round of $750 million, led to a valuation of $35 billion and a market cap of over $40 billion. UiPath co-founder and CEO Daniel Dines controls a stake worth more than $7 billion, putting his net worth at $7.63 billion.
UiPath is frequently labeled a software company, though it specifically deals in RPA (robotic process automation), which automates repetitive or dull tasks that would otherwise be done by humans through machine learning. The bots that the company creates are essentially codes that do anything from data entry to insurance claims processing.
“Much like how self-driving cars emulate human drivers but still reuse the existing car and road infrastructure, UiPath has created a form of automation that emulates people performing a business activity on a computer,” Dines said in a statement about the IPO.
While the nuts and bolts of UiPath may not seem terribly exciting, clients like Google, GE, and NASA rely heavily on the bots to increase productivity and save money. Japanese bank Sumitomo Mitsui, for example, has estimated that UiPath saves the company $500 million each year. Those clients raised the company’s profile, slowly turning it into one of the hottest startups in the AI industry.
A brief history of UiPath
UiPath was co-founded in 2005 by Daniel Dines, a Romanian software programmer who moved to Seattle in 2001 to work for Microsoft. “My first years were terrible,” Dines told Forbes. “In meetings, I understood 50% to 60% of what they talked about, and I couldn’t speak anything.”
His limited knowledge of English didn’t deter him from learning everything he could about programming. After four years with the company, Dines decided to move back to his native Romania to start his own company, DeskOver. The first 10 employees worked out of an apartment in Bucharest as a tech outsourcing company, but it wasn’t until 2011 that Dines hit upon the idea for what morphed into UiPath. An Indian customer was using DeskOver’s then-product, SDKs (software development kits), to automate mundane tasks like data entry. Dines realized that his company’s software was better suited for RPA technology, and soon UiPath was on the right path.
Despite not inventing the bots, UiPath quickly caught up to its rivals, becoming the largest company in the RPA industry and outpacing competitors like Blue Prism (which was founded in 2001 and coined the term RPA) and Automation Anywhere. UiPath’s final name change occurred in 2014, when the company was making $500,000 in revenue and Dines was beginning to target Silicon Valley clients.
Dines used friendly tactics to grow the business: instead of competing with big firms that could perform many of the same automation tasks, UiPath would turn them into customers by proving how much money its service could save them. By 2017, Dines had secured a $300,000 contract with GE, and opened up a New York headquarters, while keeping the Bucharest office as an R&D department.
Today, UiPath has offices in more than 30 countries, with a total of more than 2,800 full-time employees. Dines always had a global focus for the company, so while UiPath has been a force to be reckoned with in Silicon Valley, North America only makes up a third of its client base. The other two thirds come from Europe and the rest of the world, respectively. Although rival Blue Prism went public back in 2016, UiPath has emerged as the biggest RPA company in terms of both valuation and funding.
It’s been Dines’s plan to take UiPath public for quite some time. In a 2019 interview with Forbes, he said he wanted the company to be IPO-ready by the end of 2020, with plans to go public in 2021. Even before the pandemic, UiPath was on track, but since the software industry’s explosion after March 2020, the company’s growth has soared.
If underwriters buy the allotted shares, UiPath’s IPO will be the third-largest in history after Snowflake (September 2020) and Qualtrics (January 2021). The software and automation boom isn’t likely to disappear anytime soon, making more growth for UiPath nearly inevitable.
“As a public company, our mission will continue to be accelerating human achievement by empowering people to delegate work to the robots,” Dines said in a statement. “This is the promise of the fully automated enterprise. The future of work is human, it’s creative, it’s social, and it’s dealing with the unexpected – together.”