The emergence of the COVID-19 pandemic may have ground the operations of countless businesses around the world to halt over the past year, but it cleared a wide-open path to a successful initial public offering for UiPath [NYSE:PATH].
And when it comes to the path that the robotic process automation (RPA) company has set off on, it appears to be one with a steady uphill climb on its horizon.
Robotics for dummies
Initially launched in 2005 in Romania by co-founders Daniel Dines and Marius Tircă, UiPath is a global business automation software technology company, based in the U.S. since 2015, that specializes in what is essentially the equivalent of robotics for dummies.
UiPath’s RPA software allows businesses and individuals without information technology skills or software coding experience to map out and implement their own artificial intelligence capabilities to allow for the automation of time-consuming and repetitive tasks, both in the back office and front office.
Users of the company’s RPA software can create their own software robots to automate a wide variety of tasks ranging from things such as invoice processing and data entry, to the deployment of thousands of automated bots. And there is no shortage of areas where such automation can be applied, from business departments such as accounting and human resources, to legal and many more.
While such automation is something that many companies have been interested in and pursuing for years, the coronavirus and the resulting need for social distancing and remote working has expedited demand for RPA tools such as UiPath’s software. And with remote work expected to become the new norm, at least to some degree, long after the pandemic has finally become nothing but a bad memory, demand is only expected to increase.
UiPath was one of the earliest suppliers of RPA software
UiPath was one of the earliest suppliers of RPA software, and quickly gained a foothold in the US public sector by automating many data-entry related functions of the federal government. “The US public sector is particularly attractive for RPA given its high levels of bureaucracy and the robustness of its contracting sector – contracts that by nature require data entry and other repetitive tasks,” said Michael Levy, a senior analyst at Denver, Colorado-based Harbor Research. And though growing competition in this space from existing business automation providers such as Appian, Alteryx and Pega and IT staffing and consulting firms such as Accenture and Deloitte cannot be discounted, he believes UiPath is poised for long-term growth as long as the company does not overlook the importance of the human aspect of large-scale automation and invests in business process realignment and change management systems that can prevent the loss of jobs.
“UiPath’s early entrance and dominance has insulated their market position as the top RPA software supplier and has led UiPath to be synonymous with RPA in the way that Netflix and Uber have become verbs,” said Levy. “UIPath’s IPO and valuation are testaments to their ability to scale and the massive potential of RPA to change how businesses run.”
UiPath initially filed for its IPO in late March after securing $750 in venture funding at the start of February. The company’s IPO stock price was set at $56 on April 20th, giving it a valuation in excess of $29 billion. In its first day of trading the company’s stock opened at $65.50, reaching a high of $70.74 and a low of $64.84 before closing at $69.00. Since then, the stock has trended higher, reaching a high of $83.40 on April 27th. In its most recent day of trading it closed at $75.41 on April 28th.
According to Gartner, the RPA market currently totals $1.9 billion. But it is expected to rise by 114% by 2050, according to “Global RoboticProcess Automation Market Insights: Impact of COVID-19 and Future Expectations to 2025,” a recent report. For its part, UiPath has already experienced significant growth of its own, seeing its total revenue rise to $608 million in 2020, up from $336 million in 2019.
“UiPath’s IPO is showing just how large of a market RPA actually is, and it will continue to see strong, future growth. Companies are coming to the realization that automation is a true driver of business value and that it’s no longer a nice-to-have, but a necessity, especially following the effects of COVID,” said Erik Severinghaus, executive vice president of business development at Vancouver, British Columbia-based sales order and invoice automation solutions provider Conexiom.
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