UiPath leads march of the software robots

Accel Partners’ $30m stake in UiPath underscores the rise of robotic process automation in managing routine processes

As its very name suggests, the ICT industry does not lack for three-letter acronyms and abbreviations but there’s a good chance that very soon another one will become much better known. Robotic process automation (RPA) is a young market but one that is growing quickly because it stands to change fundamentally the way organisations run clerical processes.

RPA essentially replaces manual, human tasks such as cancelling lost credit cards, claims handling for insurance, employee on-boarding in HR, back-office support functions and other mundane chores as they are automated via software rules and business user-friendly process mapping.

Proof of the growth of the sector came with the late-April announcement that Accel Partners will invest $30m in RPA pioneer UiPath. The Romanian company, which had previously raised $1.6m in seed capital, was founded by CEO Daniel Dines, a mathematician and former Microsoft software developer. From Bucharest it builds software robots that help businesses automate repetitive processes such as those listed above.

UiPath is far from being the only company to see the benefits of RPA and there is a fast growing collection of startup software developers and consultants in the space including Automation Anywhere, Epiance Software, Jacada, and the UK’s Redwood and Blue Prism, which has seen its shares soar since floating early in 2016. But UiPath’s route might be emblematic of how RPA will deliver on its promise.

UiPath will use the incoming cash to grow global sales and marketing as well as in research and development where the company is doubling down on artificial intelligence and cognitive capabilities.

Kulpreet Singh, managing director for UiPath in EMEA and APAC, says the AI and cognitive smarts will help to make RPA faster, able to handle more complex processes (such as where interactions are currently required), and more adaptable to changing needs.

UiPath, founded in 2004, has 150 employees and over 150 partners including business process outsourcing firms, IT outfits and consulting giants such as Capgemini and Deloitte. Lufthansa, Swiss Re, Generali, Telenor and Dong Energy are among its approximately 200 customers.


Robots marching fast

The RPA market is infant but growing fast and one forecast, by Grand View Research, expects it to reach $8.75bn by 2024. The VCs are certainly sniffing around the broader software intelligence space with billions flowing into AI and machine learning startups.

Luciana Lixandru, a partner at Accel, says, “The proposition is very straightforward: these large organisations have been focused on increasing efficiencies so this frees up time and money for more creative work.”

Another impetus is compliance, she adds.

“Highly regulated industries require transparency and the software logs every step it takes so if you want to go back to what happened, it’s clear and transparent. That’s why some independent analysts expect the market to grow to $9bn and why we’re investing in UiPath, which we think is positioned to be the leader. [RPA] is a nascent space and this is our first investment in it. We think we backed the right horse; UiPath has reached significant revenue with very little capital.”

As for Accel, the company has a decent track record in helping European companies such as business intelligence firm Qlik (originally from Sweden) and identity management company ForgeRock (with roots in Norway) to become global forces.


Opportunities and obstacles

UiPath’s Singh says the company differentiates itself on ease of use, flexibility and enabling customers to add their own value on top of the platform. But he does admit to some obstacles that must be hurdled.

“In order to be de facto you need to have a community about you,” he says. “There are not many training courses if you want to become an RPA developer and not many training providers.”

The company recently launched a free MOOC in the hope that a large pool of developers will become available. Singh also wants to provide strong support:

“It’s not complicated [to use UiPath] but it’s not like Microsoft Excel or Word; you still need some help, especially in large enterprises with multiple applications [to interface with].”

The opportunity is vast, he argues.

“There’s an incredible amount of effort spent on tasks that are repetitive and don’t really have a demand on intellect and the BPO industry services those requirements. But RPA takes out grunt work out and can make it more efficient and effective.”

And what of the old chestnut that such automation will lead to mass unemployment?

“This is disruptive, there’s no way around it,” he says. “It’s not chipping away at the edge and it changes how we work, but having said that you need people who can develop and monitor so there’ll be another group of jobs around RPA. We’re seeing customers take the savings and redeploy people on either tasks that require some intelligent thinking or insight generating, or improving the customer experience.”

Singh won’t disclose UiPath revenues but says they grew 500 per cent in 2016 and will do something similar in 2017. RPA will become “a central pillar” across IT, BPO and consulting, he believes. We don’t know how far they’ll go, how many of them there will be or what they will do, but one thing is clear: the software robots are coming.