A recent study from Bain indicates that automation will fuel an economic boom for the next 10 -15 years, far disruptive than anything we have seen in the last 60 years. Enterprises are seeking to invest in automation and this newest wave will stimulate further investment estimated to be $8T. Poised to capitalize on this unprecedented interest and market opportunity is UiPath. Its focus is on robotic process automation through its software platform that is designed for enterprise companies to automate repetitive tasks. Streamlining workflows in a scalable manner and saving corporations money, the platform allows you to train software robots, acting as an operating system for your automation needs. The company is already working with some big names like Oracle, Accenture, NASA and its platform is versatile enough that it can be deployed across virtually any time of industry or application to build a highly scalable and adaptive robotic workforce.
AlleyWatch sat down with CEO and cofounder Daniel Dines in an informative discussion to learn more about automation, robotic process automation, the company’s impressive growth, and its latest mega round of funding from some of the most respected investors.
Who were your investors and how much did you raise?
We recently announced our Series B funding round, in which we raised $153M. Previous investor Accel led the round, with new investors CapitalG and Kleiner Perkins Caufield & Byers contributing. UiPath seed investors Earlybird’s Digital East Fund, Credo Ventures, and Seedcamp also participated in the round.
Tell us about your product or service.
Our product is a software suite that automates business processes using robotic process automation (RPA) technology. Unlike ERP or BPM software products, RPA operates by emulating human actions on the user interface level. This feature provides remarkable time-to-value benefits because it automates processes without disturbing underlying IT systems or data repositories.
UiPath’s software suite is architected as an enterprise platform consisting of a Studio for creating process automation, software Robots (attended and unattended) that execute the automation, and Orchestrator – a management console that deploys, schedules and manages the robot workforce.
What inspired you to start the company?
After graduating from the University of Bucharest with a M.S. in Mathematics and Computer Science, I was recruited by Microsoft to join the SQL Server development team in Seattle. After becoming a senior software engineer on the team, I was assigned to work with the SQL Server Agent product group. This product was an innovative tool designed to combine SQL Server Administrative work steps and schedules into automated jobs.
After eight years it was time to return to Romania, but I didn’t want to stop developing automation tools. To do that in Bucharest meant starting a company, so I joined forces with Marius Tirca – now CTO of UiPath – and other key people to do just that. That group developed an SDK for user interface (which is the origin of the “Ui” in the company name) automation, aimed at developers working in large software development teams. Many of the key features in UiPath’s current product can be traced back to this original work.
How is it different?
Our enterprise RPA platform has several innovations that provide customers with unrivaled value. Studio incorporates Windows Workflow Foundation, so automation is accelerated with pre-built drag/drop activities and process recorders; Robot uniquely comes as either fully featured attended or unattended versions, both of which use native Computer Vision to see Citrix environments with unequalled accuracy and responsiveness; and Orchestrator features unmatched multi-tenancy capable of scaling to 10,000 robots.
In contrast with competitors, our full-featured commercial product is freely available for download by individuals, small businesses and educational organizations. We are on a mission to democratize RPA, and that starts with greater access to the technology.
Additionally, to help individuals and organizations most effectively use the software, we have also established a free online training and certification program, “UiPath Academy.” This has been extremely popular, with 55,000 people trained in the last 10 months alone.
What market are you targeting and how big is it?
Our primary market is large, global enterprises. These companies have already implemented ERP systems, are organizationally comfortable with automating business processes, and have the most to gain in terms of efficiency, performance and cost reduction from leveraging RPA technology to complete and expand their existing automation footprint. They are also very likely to have ongoing process improvement initiatives, enabling them to quickly build a pipeline of qualified RPA opportunities.
A secondary market is regional enterprises that have a strong culture of innovation, and are proactively striving to maintain or increase their competitive position in the marketplace.
RPA is an emerging technology with huge potential for expansion. The market for software robots, including those that incorporate artificial intelligence, is expected to grow to $2.9 billion by 2021, up from $250 million in 2016, according to Forrester Research Inc.
What’s your business model?
Our business model is one of product transparency, close customer collaboration and frequent version releases. Transparency and collaboration guide our product roadmap, while frequent releases enable our customers to increase competitive advantages in the marketplace. This model is very different from the competition.
For example, common practice in the RPA industry is to keep product access and training resources strictly within partner channels until the customer’s buying decision is made. In contrast, UiPath offers product downloads and free online training. Historically, our competitors have released new product versions every eighteen months to two years, whereas UiPath issues a new release approximately every six months.
Our business model is supported by significant investments. To illustrate this, UiPath has the largest development team in the industry, with more than 200 developers working in Bucharest and Bangalore – and more to come in a new Seattle product development center. Our global customer support resources are also the largest in the industry, with more than 150 people and 14 global offices.
When it comes to beginning their RPA journey, customers have the choice of starting it with one of our Implementation Partners or having the company’s Customer Success team help them with the initial proof of concept and subsequent pilot automations.
The company has scaled very rapidly since its last funding. Are there a few defining events that you can share with us that contributed to this rapid growth?
One defining event was the release of v2017.1, which happened two months before the Series A funding. A major innovation in this release was Orchestrator’s Intelligent Scheduling, which involved robots managing robots to minimize human involvement and dramatically increase scalability. The intelligent scheduling feature was very well received in the marketplace.
Another defining event was the v2017.2 release, which featured Orchestrator’s Multi-tenancy. This meant a single Orchestrator instance allowed customers to give different internal automation groups (e.g., accounting, HR) autonomous environments with complete security and privacy. Still unique in the industry, this feature was also very popular.
Both features radically increased RPA scalability. This not only attracted many new customers, but also enabled existing customers to dramatically increase the size of their planned deployments.
What was the funding process like?
We were very fortunate to have our choice of top-tier investors this round. We had great conversations and meetings with a number of investors,and ultimately partnered with those who we felt most closely shared our mission to accelerate the growth of RPA and steer better ways of working.
What are the biggest challenges that you faced while raising capital?
There’s no question our Seed round was the toughest funding challenge. Not only was the company young and our track record relatively brief, but the RPA industry itself faced major credibility questions. For example, there was real doubt about the technology’s value proposition. The idea that process automation could be accomplished in weeks, then deliver double-digit savings and 100 percent operational accuracy seemed too good to be true.
For our Series A round, RPA’s value proposition – as well as UiPath’s differentiators in the marketplace – had been conclusively validated. The real challenge was showing that the organization could manage and sustain its high rate of growth.
For the Series B round, that challenge had been met and our Series A investor, Accel, could see the entire industry was on fire with remarkable growth.
What factors about your business led your investors to write the check?
I think most of our investors would say that they were impressed by the tremendous growth our business has seen – particularly in the last 12 months. In 2017, we experienced a 600 percent increase in customers, an 800 percent increase in annual recurring revenue and a 400+ person increase in employee count. Our traction speaks to the value of our technology in today’s market, and I think our investors see huge opportunity in that.
What are the milestones you plan to achieve in the next six months?
The Series B funds will help us accelerate our operational and product roadmap, particularly in the areas of machine learning and AI. Additionally, they will help support our rapid global expansion. In the next 90 days, we plan to open offices in Amsterdam, Houston, Munich, Paris, Seoul and Washington D.C., while doubling our current employee headcount.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
I can offer the lesson I learned during UiPath’s struggles for funding: culture always trumps tactics. Does your culture truly foster collaboration and innovation? If so, that will attract funding. Does your culture foster a sense of humility? If so, that will project the maturity that sustains a VC’s interest.
Where do you see the company going now over the near term?
We are going to continue to focus on helping companies implement RPA. By opening offices around the globe, we’ll be able to serve even more markets than before. We’re also constantly evaluating our enterprise RPA platform and exploring ways that it can be enhanced to deliver even better functionality and customer experiences.
What’s your favorite restaurant in the city?
If you’d asked a few months ago I could have told you. Now that I been here long enough to appreciate the galaxy of choices, the idea of having favorites seems farther off.