5 investors discuss the future of RPA after UiPath’s IPO – TechCrunch
Robotic process automation (RPA) has certainly attracted a lot of attention in the last year, as startups, acquisitions and IPOs came together in a brisk market. It all seemed to culminate last month with UiPath’s initial public offering. The company, which seemed to come out of nowhere in 2017, eventually had a final private valuation of $ 35 billion. It then had the audacity to do justice to it when it went public. A few weeks later, it still has a market capitalization of over $ 38 billion, despite occasional fluctuations in share prices.
Was that a high point in technology or a flash in the pan? Probably not. While this all seemed to converge over the past year with a huge increase in attention to automation in general during the pandemic, it is a market category that has been around for a while.
RPA enables companies to automate a group of very mundane tasks and let a machine do the work instead of a human. Make sure you find an invoice amount in an email, paste the number in a spreadsheet, and send a Slack message to Accounts Payable. You could have humans do it, or you could do it faster and more efficiently with a machine. We’re talking about mind-numbing work that lends itself well to automation.
In 2019, Gartner found that RPA was the fastest growing category in enterprise software. Even so, the market is still surprisingly small. IDC estimates it will only reach $ 2 billion in 2021. That’s pretty small for the company, but it shows that there’s a lot of room for growth.
We spoke to five investors to learn more about RPA and the general consensus was that we are just getting started. While we will continue to see the players at the forefront of the market – such as UiPath, Automation Anywhere, and Blue Prism – vying for position with the big business vendors and startups, the size and scope of the market has and is a lot of potential probably to continue to grow for some time.
To find out all of this, we asked the following investors:
- Mallun Yen, Founder and Partner, Operator Collective
- Jai Das, Partner and President, Sapphire Ventures
- Soma Somasegar, Managing Director, Madrona Venture Group
- Laela Sturdy, General Partner, CapitalG
- Ed Sim, Founder and Managing Partner, Boldstart Ventures
We have seen a number of RPA startups in the past few years, with companies like UiPath, Blue Prism, and Automation Anywhere ahead of the pack. Where are the greatest opportunities when space matures?
Mallun Yen: RPA, one of the fastest growing categories of software, has grown by over 60% in the past few years, up from 13% for enterprise software in general. But we barely scratched the surface. The COVID-19 pandemic has forced companies to change the way they run their businesses, how they hire and assign staff.
Given that the workforce will, at least in part, be permanently removed from the distance, companies are realizing that this change is permanent and must therefore make fundamental changes in the way they run the company. Hiring, training, and deploying remote workers to perform routine processes that are prone to human error and boredom, among other things, is just suboptimal.
Jai Das: All of the companies you listed focus on automating simple, repetitive tasks that are performed by humans. These are mainly data entry and data validation jobs. Most of these tasks will be automated over the next few years. The new opportunity lies in the automation of business processes that involve several people and machines in a complicated workflow with AI / ML.
Sometimes this is also referred to as process mining. There have been BPM companies in the past that have tried to automate these business processes, but they required many services to implement and maintain these automated processes. AI / ML offers software the ability to replace all of these services.
Soma Somasegar: With all the progress we’ve seen with RPA, I think it’s just getting started. Global RPA market size demand in terms of revenue was more than $ 2 billion last year and is projected to exceed $ 20 billion in the next decade and with a CAGR greater than 30 in the next seven to eight years % grow analysts like Gartner.
That is an amazing rate of growth in the years to come, and it reflects how early we are on the RPA journey and how much is still ahead of us. A recent study by Deloitte shows that up to 50% of tasks in companies that are carried out by employees are considered mundane, administrative and labor-intensive. That’s just a recipe for a lot of process automation.
There are many opportunities that I see here, including process discovery and mining; Process analytics; Applying AI to promote effective, more complex workflow automation; and the use of Low Code / No Code to give a wider audience the ability to automate tasks, processes and workflows, to name a few.
Laela Robust: We are far from having to think about the maturation of space. In fact, RPA adoption is still in its infancy considering its immense potential. Most organizations are just beginning to explore the many use cases that exist across industries. The more companies dive into RPA, the more use cases they envision.
I expect market leaders like UiPath to continue to innovate quickly while expanding the breadth and depth of their end-to-end automation platforms. As technology evolves, we should expect RPA to penetrate even deeper and automate more and more – and more important – business processes.
Ed Sim: Most large automation projects require a significant amount of professional services to deliver on promises, and two areas I still see opportunities in are startups that can bring more intelligence and faster time to value. Examples include process discovery, which can help companies quickly and accurately understand how their business processes work and prioritize what should be automated rather than just redesigning an existing workflow.