UiPath is a robotic process automation provider of a complete software platform helping organizations automate repetitive business processes. The ‘robotic’ term can be misleading, as it has nothing to do with actual physical robots. Instead, it is a software tool that digitises highly repetitive work processes. Furthemore, the UiPath’s mission is to remove repetitive tasks and let software robots do the grunt and boring work. UiPath enables businesses and organizations to develop an agile digital workforce by providing a platform for software robots orchestration.
In March 2018, Robotic Process Automation (RPA) software developer UiPath was valued at USD 1 billion, a rare event for the company to be called a ‘unicorn’. However the road to success of this Romanian-born startup has been far from easy. Despite numerous challenges and setbacks, UiPath became the leader of the global RPA market – proof that the billion dollar company can be developed in the eastern part of Europe. But, emerging from Bucharest as leader of a market that is only now taking shape at a global level, as a seller of enterprise software, Romania’s first unicorn is part of an extremely rare breed. Especially considering that it started developing its core product independently of a market it had very little knowledge of, and only couple of years ago considered shutting down the business.
According to Dan Nechita, president and co-founder of Smart Everything Everywhere, a local initiative for accelerating Romania’s transition into the digital age, the success of UiPath came not due, but despite the conditions offered by the current environment and is down to the start-up’s team and business acumen. “The scale of their valuation is encouraging for the Romanian startup ecosystem, but it came as no surprise for those who followed their evolution – not only because they are developing a disruptive technology, but also because they have a great team and business acumen. In other words, where UiPath is now is the result of more than just great ideas – it is the result of hard work.”
From the Figure 1., you can see the fundraising story of UiPath. From the humble valuation of USD 8 million in August, 2015, where they received USD 1.6 million in funding from Earlybird VentureCapital, Seedcamp and Credo Ventures (Seed round) to the IPO in April, 2021 at USD 35 billion valuation where they received USD 1.4 billion. In Series A which was in April, 2017, they received USD 30 million from Accel, Earlybird VentureCapital, Seedcamp and Credo Ventures. After that, UiPath secured USD 153 million in funding after Series B in March, 2018 becoming the official unicorn at valuation of USD 1.1 billion. In Series B round, Accel, Earlybird VentureCapital, Seedcamp, Kleiner Perkins, CapitalG and Credo Ventures took part, providing the start-up with needed capital to expand their operations and capture more market share in the global RPA market. Accel, Sequoia Capital, Institutional Venture Partners, Meritech Capital Partners, CapitalG and Madrona Venture Group took part in Series C round in September, 2018 injecting USD 265 million in UiPath at USD 3 billion valuation. In April, 2019 at Series D round UiPath received USD 568 million in funding from Accel, Sequoia Capital, Wellington Management, Institutional Venture Partners, CapitalG, Dragoneer Investment Group, Coatue Management, T.Rowe Price, Sands Capital Ventures and Madrona Venture Group. Series D round valued the start-up at USD 7 billion. Series E round was held in July, 2020 where the start-up received USD 225 million at valuation of USD 10.2 billion. Accel, Tiger Global Management, Sequoia Capital, Tencent, Wellington Management, Institutional Venture Partners, Dragoneer Investment Group, Coatue Management, T.Rowe Price, Madrona Venture Group and Alkeon Capital took part in Series E round. The largest funding round before the IPO was Series F round in February, 2021 when UiPath secured USD 750 million in funding at USD 35 billion valuation. In Series E round, Tiger Global Management, Sequoia Capital, Institutional Venture Partners, Dragoneer Investment Group, Coatue Management, T.Rowe Price, Altimeter Capital and Alkeon Capital took part. It could be said that the majority VC funds and investors who invested in UiPath stayed with them and believed in them, helping them in achieving amazing growth and success which was awarded in April, 2021 when UiPath went public at USD 35 billion valuation.
Figure 1. UiPath's Fundraising Story
Romania’s first USD 1 billion tech start-up has its beginnings in a software outsourcing company founded by UiPath’s CEO Daniel Dines and Marius Tirca, its CTO, in 2005. Located in a flat in Bucharest’s Delea Veche, DeskOver built automation libraries and software development kits for companies such as IBM, Google and Microsoft, which embedded them in their own products. But it wasn’t until 2012 that the team, which consisted of 10 people, realized the market fit with RPA and started putting its resources into building a platform for training and putting together the software robots. “During that period, we failed multiple times. Uipath is a series of all possible mistakes that one entrepreneur can make,” says Daniel Dines. “The first mistake,” Dines recalls, “was to build a start-up while also doing consulting work and outsourcing. We had to bootstrap the company by doing consulting work. It’s distracting, really. You’re much better raising money by going to accelerators. But in our time it wasn’t possible. I didn’t even know that that was the idea of building a start-up: to raise money from investors, validate the ideas, build a go-to-market product and then a strategy. What changed my perspective was looking at new start-ups coming out of Silicon Valley. TechCrunch started talking about new start-ups, and then there was Y Combinator and then Paul Graham, one of my virtual mentors whose thinking really influenced me deeply. And I saw that you could actually build a company out of love for technology. For the sake of doing something for the greater good, of doing something better in this world. It changed my thinking completely. We gave up outsourcing completely and we said, ‘let’s build the best thing that we can and then we’ll see what happens.’ That was really a pivotal thing in our history,” he says.
But they still had space to make even more mistakes. “We launched our product too late,” Dines explains.” That’s because we polished it too much, instead of bringing it to market much faster, getting feedback and going where the market wanted and not where we wanted to take it. And second, we killed it too late. So we didn’t fail fast, we failed late. We launched it late and failed late. Two big mistakes. I think for two to three years we were going in the wrong direction” he adds. The first client discovered them, not the other way round. The Indian chapter of a large BPO company was doing a pilot project to find the best provider of RPA technology to meet its business needs. UiPath, still named DeskOver at that time, competed against other RPA providers and came out on top. “We understood there was a huge market out there of people who just do repetitive processes all day long, for whom our technology, which emulates what people do, is perfect. From that moment on, things changed dramatically for us. We started to grow,” Dines explains. In 2013, DeskOver launched the first UiPath Desktop Automation product line based on Microsoft Workflow Designer that specifically targeted the RPA market. “In 2014 and 2015 it seemed to me that we had giant competitors, but without looking at them, we started to grow the team and things later exploded. There comes a moment when you need to get a little crazy,” Dines says. In 2015 DeskOver became UiPath, and wrapped its first partnerships with several global BPO and consulting firms. 2017 brought UiPath industry recognition and marked the year of the company’s global expansion. In February, it was recognized as an RPA industry leader in the Forrester Wave Robotic Process Automation, Q1 2017, which compared 12 RPA vendors against criteria in the areas of current offering, strategy and market presence. When assessed solely by RPA technology criteria, it received the industry’s highest score. “The ranking counted a lot,” Dorache says. “It matters a lot what analysts say, because they communicate with the funds and for us that was good feedback. Besides making sales, it is also important that the product you bring is indeed very good. It mattered because we had started as a team of ten. And by the time this report came out, we were a company that delivered. And this is important, because big companies want to deal with big companies.”
Now, several years later, after its recent IPO in New York, it is clear that this Romanian born company is more than ready to make its global and dominant impact in the emerging and growing RPA market.