UiPath Works Connected Office Into $36 billion IPO

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Wednesday (April 21) proved to be a good day at the office for software firm UiPath. The company, which uses digital transformation technology to connect the disparate front and back-end office functions, ended its first publicly traded day at $69, up from its opening of $56. The company also ended the day with a $36 billion valuation.

At a time when B2B companies are working to digitize office functions, the initial public offering (IPO) was closely watched for its potential as other firms consider their own public offerings. The technology’s initial application was in back-office tasks — accounting, human resources and claims processing, segments known for a lot of repetitive, paper-work intensive tasks. Over the last 15 years, however,  the company has added front-office areas for its bots, including customer-facing tasks that can also be repetitive as well as routine data-entry and processing tasks.

UiPath is hitting the market at a time of rapid growth as it saw its revenue increases 81 percent last year to a whopping  $607.6 million while narrowing its losses to $92.4 million from $519.9 million a year prior. UiPath’s gross margin of 89 percent is among the highest in software and is known for being particularly effective at both keeping their customer signed on, and using more of their services.

The brainchild of Microsoft alumni Daniel Dines, who returned to his native Romania to build his “crazy idea” to create his own software company, said Bloomberg, the firm’s product is  specifically known as “robotic process automation technology.”

“Our platform leverages the power of artificial intelligence, or AI, based computer vision to enable our software robots to perform a vast array of actions as a human would when executing business processes,” the company said according to Marketwatch. “These actions include, but are not limited to, logging into applications, extracting information from documents, moving folders, filling in forms, and updating information fields and databases.”

The idea has caught on over the last decade-and-a-half and caught fire over the last few years. UiPath was valued at $7 billion in 2019, is now worth over $30 billion in the wake of its IPO. Dines, who controls 88 percent of the company’s voting shares, is now among the world’s 500 richest, according to the Bloomberg Billionaires Index.

“Starting a company from a small place with no market has a hidden advantage: It forces you to think globally from day one,” Dines said in a letter included in UiPath’s registry filings for its listing. The listing was itself a long time in coming — as Dine had indicated the company was preparing for a listing back in early 2020, as well as in media interviews on his firm’s future.

“They say they want to unlock human creativity and ingenuity by enabling fully automated enterprise and empowering workers through automation,” said The Motley Fool. “The goal being we want to free up more of the creative work, more of the moments where humans really can add value to something within normal workflows. That’s analysis. In some cases, that’s creative work. But the pitch from this company is we are not replacing people. We are trying to free them up to do work that is a little bit more filling and also where they’re more valuable.”

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