What Does This Mean For RPA (Robotic Process Automation)?
BERLIN, GERMANY – DECEMBER 12: Co-founder and CEO of UiPath Daniel Dines speaks on stage at … [+]
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This week, UiPath announced a Series E round for $ 225 million at a valuation of $ 10.2 billion. Alkeon was in charge of the business. Other investors included Accel, Coatue, Dragoneer, IVP, Madrona Venture Group, Sequoia Capital, Tencent, Tiger Global, Wellington and T. Rowe Price Associates.
UiPath is a leader in Robotic Process Automation (RPA) with an Annual Recurring Revenues (ARR) of more than $ 400 million. RPA technology enables the automation of lengthy and repetitive business processes. The segment is also the fastest growing in the enterprise software market.
“Their growth story is pretty straightforward, but is often lost in Silicon Valley as we all strive for that shiny new property,” said Pankaj Chowdhry, CEO of FortressIQ. “They offer a great product that enables their customers to get more out of their legacy investments.”
The irony is that the core technology for RPA is based on something pretty simple: screen scraping. This makes it possible to replicate a user’s input patterns with applications.
However, companies like UiPath have innovated RPA systems like machine learning, computer vision, process mining, intelligent OCR (Optical Character Recognition), and NLP (Natural Language Processing). The result is that the bots are getting smarter.
Note that the COVID-19 pandemic has also accelerated growth – at least for the bigger players. “Companies today need to ensure that they have the right structure and the right processes in place to withstand all demands,” said Vijay Khanna, chief corporate development officer at UiPath. “As a result, they are increasingly turning to automation to accelerate their digital transformation efforts and ensure that they can be as productive and flexible as possible in the future.”
The RPA industry has been the subject of various criticisms. For example, the technology is often viewed as a band aid that is not scalable and requires too much training to create useful bots.
“RPA disruptions must be consumed in order to provide self-service to users,” said Muddu Sudhakar, CEO and co-founder of Aisera.
The competitive environment is also becoming more intense. Note that Microsoft is investing heavily in its own RPA platform. And there is excitement that Amazon and Google will seize the opportunity.
“The UiPath funding is in line with our view of a technology at the proverbial tipping point,” said Adib Ghubril, research director for the Info-Tech Research Group. “IBM has been actively trying to strengthen its position in this market since the beginning of the year. In fact, many believed that Automation Anywhere or UiPath would be the goal. The fact that IBM has opted for a much smaller player – WDG Automation – suggests that the big three – Automation Anywhere, BluePrism, and UiPath – like their chances of going it alone, at least for now. “
The UiPath round also shows that the RPA market is massive and still in its early stages. “The adoption of RPA continues as organizations recognize the benefits of automation for operational efficiency, cost reduction, and employee and customer experiences, making RPA a top priority for technology investments,” said Barry Cooper, President of Enterprise Group at KIND. “Given the existing economic realities that are causing some companies to reduce their workforce and seek cost efficiency, RPA helps maintain business continuity by complementing the existing workforce and helping them do more with less. Robotic software can either do some of the manual tasks to free up staff time for other important areas, or support the human workforce side by side with visited bots. “
But does this mean that the big RPA companies are adding large amounts of venture capital to their balance sheets, that there are fewer opportunities for startups? Is there a displacement effect?
Well, not necessarily.
“Small operators have the opportunity to offer unique and affordable products to disrupt the digital world,” said Vadim Tabakman, director of technical evangelism at Nintex. “As the world focuses on how machine learning and artificial intelligence can help, there are exciting ways small operators can investigate whether it will be more difficult for larger companies to implement and modify their existing tools.”
Tom (@ttaulli) is a startup consultant and author of Artificial Intelligence Fundamentals: A Non-Technical Introduction and Robot Process Automation Guide: A Guide to Implementing RPA Systems. He has also developed various online courses, for example for the COBOL programming language.