The initial hype around bots — applications that run partly or entirely using natural language processing, machine learning, computer vision and other AI tech to help consumers ask and answer questions, buy things and get other stuff done — may have waned a bit, but a startup building the equivalent for the enterprise world, in a fast-growing field called robotic process automation, is seeing its star rise.
TechCrunch has learned that UiPath, a startup that builds ‘software robots’ for enterprises to help automate legacy and back-office functions, has raised a Series B round of funding that sources tell us is around $120 million. The funding will catapult it to a valuation of over $1 billion.
“Catapult” is the operative word here: the company last raised money in April 2017, a $30 million round that valued UiPath, founded in Bucharest, Romania but now headquartered in New York, at around only $109 million, according to data from PitchBook. In other words, this latest funding increases its valuation nearly tenfold.
“I’ve never seen an enterprise company grow this fast,” one source close to the company said to us, when we asked how its valuation jumped so high, so quickly.
From what we understand, this latest round — which the company will use to continue investing in its product and growth — will include existing investors along with some high profile new backers. A couple of sources have told us that Kleiner Perkins Caulfield Byers is in this round, along with other “household name” VCs (we are still working on figuring out who these might be). Its previous backers include Accel, Credo Ventures, Earlybird and Seedcamp.
The company is announcing the funding as soon as next week. It has declined to talk to us for this article. KPCB has not responded to our request for comment, so the final amount and investor names will likely change.
Another clue to the final amount and the fact that an announcement is around the corner: just this morning, UiPath filed documents in Delaware that authorized $100 million+ of a Series B & B-1, where the post-money valuation could be as high as $1.15 billion, according to Lagniappe Labs, the creator of the Prime Unicorn Index.
RPA as a market is on something of a growth tear at the moment. Grand View Research forecasts that RPA services will be a $8.75 billion market annually by 2024, while Forrester projects revenues of $2.9 billion by 2021. As of the end of 2017, UiPath’s revenues were on a rate of 500 percent growth annually and from what we understand it’s growing even faster now.
UiPath, and other companies working in the area of RPA, are filling a gap in the market for large enterprises: while the general trend for businesses is to upgrade their legacy systems with new technology in the longer term, in the short term, many of them are looking for ways of making their existing systems — and staff — more efficient.
UiPath uses AI tools like computer vision, machine learning and natural language processing to automate some of the more mundane tasks around administrative systems and processing “paperwork” such as filling out insurance claims, processing invoices, and most recently, running customer contact center operations.
The idea is that using UiPath’s bots creates more time for a company’s human workers to focus on using skills that the AI systems can’t (yet?) handle, for example applying advanced judgement skills to help assess the content of an invoice, or the needs of a customer contacting the business.
“In the area of finance, for example, a lot of teams spend time creating reports but don’t require them using as much of their judgment skills, leaving the human employees with little time for the analysing part of their jobs,” Accel partner Luciana Lixandru told us at the time of UiPath’s previous funding round. “A software robot that understands what is happening on the screen using computer vision and performs the task as a human would do it becomes a useful tool.”
UiPath has fit neatly so far into the fabric of enterprise IT systems and services.
In November last year the company said that it counted over 300 large enterprises as customers — customers we’re written about before include Lufthansa, Generali, Telenor and Dong Energy — and from what we understand that number now is around double that, with customers not just in the financial sector, but also healthcare, telecom, public sector, and more.
The startup also partners with the wide array of integrators and software providers that these enterprises are already using to help build and run their IT systems, including the likes of Oracle, Accenture, Capgemini, Symphony Ventures and many others.
What’s also worth noting is the pedigree of this company. Although now headquartered in New York, UiPath was founded in Romania — a country well known for engineers but not for hatching many huge tech startups (although that is quickly changing). In the wider conversation we’ve been having about how the tech world is still too weighted in favor of Silicon Valley, it’s nice to see this example of how it’s gradually decentralising, and strong startups founded far from the Bay Area are getting the recognition they deserve.