Things have dramatically changed in robotics since the first showing of Star Wars back in 1977. For many of us the iconic R2D2 and C-3PO were probably the first robots that we ever saw. A few years ago Saudi Arabia granted citizenship to an updated version of C-3PO, the celebrated Sophia. In a few years we may all have our own Sophia’s, according to one man, whom we will discuss later in this story.
Away from planets like Tatooine, and nearer to home in a country more renowned for its vampires than its Tech. Romania joined the European Union back in 2007. But, just before that, a few developers got together in Bucharest. Then they started outsourcing automation libraries and software to some of the world’s biggest companies.
Fourteen years later, UiPath lists on the New York Stock Exchange:
“We have a vision to accelerate human achievement. And this capital will help us to continue with this vision.” Shared Daniel Dines, co-founder and Chief Executive Officer of UiPath in the interview with CNBC.
In 2017, UiPath introduced their vision of ‘a robot for every person.’ Borrowed from Bill Gates and Paul Allen, who, in the 1970s, set the goal of putting a ‘computer on every desk.’ Dines has predicted similarly, that there would be a software robot for every person.
While UiPath met Wall Street this week, Robotic Process Automation (RPA) grabbed the headlines too.
Tech firms and Robotics Process Automation
Interestingly, Google is one of UiPath’s clients. Google, renowned for its Cloud, AI and Machine Learning solutions relies on a Unicorn from Bucharest. Together the two firms are “fusing RPA with Artificial Intelligence and the cloud to help enterprises become digital businesses faster”.
On the other hand Blue Prism has a deep technical alliance with Google Cloud Platform (GCP) as well as Microsoft Azure, Amazon Web Services and IBM Cloud.
And there are further companies in this sector too. Just this week a company called Laiye claimed they have more market-share in mainland China than UiPath does.
Many suggest that Blue Prism were the true pioneers of RPA. The UK Headquartered company are joined by Automation Anywhere and UiPath as leaders in the RPA space. Much like Blue Prism and UiPath, Automation Anywhere are also partners with the big cloud providers.
Just last week Automation Anywhere earned the illustrious 2021 Cloud Computing Product of the Year Award.
Automation Anywhere is based on modern Java technologies as opposed to the C# which Blue Prism is based on. Or SharePoint, Kibana and Elasticsearch that UiPath is based on. All the companies offer tools that are similar, their main differences are usually in their geographical reach. Automation Anywhere is stronger in the U.S. market while Blue Prism and UiPath are more widespread in Europe.
With the market reported to be the fastest-growing area in enterprise software, growing at 60% per year. The scope for growth is enormous.
Similarly to how the leading RPA firms partner with the cloud platforms, they also partner with many ‘Managed Services Providers’ or MSPs like EY, Deloitte, PwC, WNS, Capgemini, HP and others. Who, in turn, provide services to banks from across Europe and the rest of the world:
Blue Prism works with BNY Mellon, HSBC, Lloyds, Credit Suisse, PayPal and Barclays to name a few of the financial institutions listed as customers on their site. UiPath work with some smaller banks across the world, whilst mainly supporting the Consulting firms who have large MSP businesses. Automation Anywhere meanwhile works with Santander, and is heavily invested with MSPs as well.
Investment in Robotics Process Automation
Sequoia, one of the most influential investors in the world, are supporting UiPath. Automation Anywhere is not to be left behind, their investors include Salesforce and Softbank. Blue Prism, who seem to reject the trappings of New York or San Francisco, are listed on the London Stock Exchange and have their head office in Warrington, UK. Blue Prism’s investors might be less well known than their counterparts, but the firm is also well supported by companies like Invesco.
Sequoia are a company known for backing the right horse. Whilst Softbank and Salesforce are no slouches, being in the illustrious company of Dropbox, Klarna, Zoom, Robinhood, Stripe, Qualtrics and so many others, in itself is a testimony to how far UiPath have come:
“Carl and the Sequoia team were impressed not only by that momentum, but by the technology; by the company’s global, decentralized workforce; by the deep partnerships it was building; and of course, by Daniel himself.” Team Sequoia posted this week.
UiPath have another challenge though, which they share with Blue Prism. Neither of the firms are profitable. Back in 2019, Blue Prism spent 104 per cent of their annual revenues on sales and marketing. Last year Blue Prism made a loss of over £40 million on a turnover of £160 million. Down from almost £70 million in losses in 2019. The board are committed to reaching breakeven by the end of 2021.
UiPath hit $607.6 million in revenue in 2020, with losses of $92.4 million, down from $519.9 million in losses in 2019. Perhaps the trend is heading in the right direction.
All the firms are paying top dollar for senior executives from the Big Tech and Consulting firms who have joined their leadership teams. It all adds up.
UiPath were valued at a staggering $35 billion just last week. This has actually now increased as their shares shot up on both debut day and yesterday. Blue Prism, the original pioneer, is only worth around £1.2 billion. But their revenues for 2020 are not as far apart as their valuations.
While the RPA firms are quick to point out the savings in the hundreds of millions of dollars that they help their customers achieve. Closer to home their own businesses are running on hope, rather than any tangible profits. And as for their valuations, it’s quite hard to explain the divergence.
Why are UiPath more than just a Tech firm?
Granted, the fact that UiPath at last count served 8 of the Fortune 10 and 305 of the Fortune Global 500, is remarkable.
UiPath has not forgotten their roots though. In fact, it was only last year that #DisruptionBanking spoke with Liviu Dan Dragan, Chairman of DruidAI from Romania. UiPath had just decided to promote the DruidAI chatbot, a huge milestone for the next potential Romanian Unicorn. DruidAI have won numerous awards across the CEE, a market that UiPath stay ‘loyal’ too, as Dines himself points out:
UiPath have invested into online training, much of which they have made publicly available for free. The selection of free courses available by the UiPath Academy is compelling. Even people with minimal experience in Tech are able to learn the basics of robotics quickly before even getting a certificate. All of this offered free on the UiPath site.
Many developers suggest that although RPA is a growing trend, it can also be treated as a buzzword by corporate leaders. Some companies involved in digital transformation are ‘RPA-washing’ instead of truly understanding the benefits of a technology that can and has shown substantial benefits.
UiPath’s CEO recently commented how one of their customers is now able to save lives as well as money through RPA. However, not all digital leaders understand this and know how to implement RPA properly. The market is still maturing and many use cases for RPA haven’t even been started yet.
What next for the RPA market?
Consolidation. UiPath already acquired companies before their IPO. With the increased capital available they will be able to add more services to their portfolio in order to compete with the other 2 main players.
As recently as last month, they bought Cloud Elements:
For now UiPath are still mainly automating processes, tomorrow they might be producing the robots on sale on your Facebook feed.
One thing is for sure, UiPath is the biggest European export since Spotify. If UiPath use some of the new capital to grow more unicorns from Central Eastern Europe, then perhaps Europe won’t be called the home of the ‘Snailicorn’ anymore.
Author: Andy Samu
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