Why SoftBank Invested $300 Million In Robotic Process Automation (RPA)


Robotic Process Automation (or RPA) is one of the hottest areas in enterprise technology today, reaching $ 1.3 billion this year, Gartner says.

According to the market research company, RPA software revenue rose 63.1% to $ 846 million in 2018, making it the fastest growing segment of the global enterprise software market with the five largest RPA providers (UiPath, Automation Anywhere, Blue Prism , NICE.). , Pegasystems) with 47% of the market.

North America continues to dominate the RPA software market with a 51% share in 2018, followed by Western Europe, while Japan ranks third with an adoption growth of 124% in 2018.

“This shows that RPA software is attractive to companies around the world because of its short deployment cycle times compared to other options such as business process management platforms and business process outsourcing,” said Fabrizio Biscotti, research vice president at Gartner.

While RPA software can be found in all industries, the biggest users are banks, insurance companies, telecommunications and utilities, all with lots of legacy systems aiming to accelerate their digital transformation quickly.

But what exactly is RPA and why such a frenzy?

One of the best definitions of RPA I’ve ever heard comes from Mihir Shukla, CEO and co-founder of Automation Anywhere, during a recent roundtable discussion on the “Future of Automation” that was also attended by Ramzi Ramsey, a partner SoftBanks $ 100. Attended Billion Vision Fund, Sanjay Srivastava, Chief Digital Officer of Genpact, and Nayaki Nayyar, President of Digital Service Operations Management of BMC Software.

“RPA is a technology that lets you type in any application, read all application screens, apply rules, and use artificial intelligence to make decisions,” said Shukla. “It means that bots can serve any software application in the world because it is able to do what anyone can do but make judgments. And when you think about it, banks, insurance companies, logistics companies have thousands upon thousands of people sitting in cubicles doing something, and not everyone is judging. That’s why you can automate this enormous amount of work for the first time with RPA. “

As RPA adoption grows rapidly, investors are flocking to the red-hot sector

Last April, UIPath raised $ 568 million in a Series D funding round valued at $ 7 billion, led by hedge fund Coatue Management, with the participation of Alphabets CapitalG, Sequoia, Accel, Madrona Venture Group, IVP, Dragoneer, Wellington, Sands Capital, and funds advised by T. Rowe Price & Associates.

And last year Automation Anywhere raised $ 300 million from SoftBank at a valuation of $ 2.6 billion.

“I’ve never seen anything grow this fast, globally, in multiple countries, and in different industries such as financial services, manufacturing, pharmaceuticals, and so on,” said Ramsey, who leads SoftBank’s investments in enterprise software. “But it’s also the multi-use case, so talk about finance, human resources, sales and marketing. So the entire category is growing at an incredible rate that I’ve never seen before for an entire industry. “

When asked why Softbank, which is trying to build the largest portfolio of companies leading the disruption in the artificial intelligence (AI) and automation trend, has pumped so much money into Automation Anywhere, Ramsey replied with 3 reasons:

  1. We thought they were the biggest company in this category
  2. We found that there were actually the largest number of large RPA implementations (over $ 1 million) in the industry, which gave us a lot of confidence to get started
  3. Finally, they are the biggest player in the US today, which we think was more important than being in countries that are less strategic

“And when we asked three of our AI portfolio companies to evaluate Automation Anywhere’s technology stack, we were really excited about the concept of RPA as a channel for AI in the enterprise,” added Ramsey. “And we’re trying to actively use even more capital to help them along the way, and we’re not going to bet on competition.”

Insights into Atherton Research

We believe RPA is a natural way to bring AI into the business and expand it. Because of this, every RPA software company needs to have an AI and machine learning (ML) strategy in place from the start.

We also assume that as companies accelerate digital transformation, RPA will not only persist and eventually replace Business Process Automation (BPA) entirely, but will grow exponentially in the years to come.

Finally, two final points of interest on the topic: According to KeyBanc Capital Markets, the global RPA market is becoming a $ 100 billion opportunity in 10 years, while McKinsey expects knowledge work automation to have potential economic impacts between 5.2 and Could have been $ 6.7 trillion by 2025.

RPA is the future of business automation and an important pillar of a digital transformation strategy .

July 3, 2021