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A $7 Billion Robot to Automate Boring Tasks Eyes an IPO

Andra Timu and Irina Vilcu

(Bloomberg) -- UiPath, a software maker valued last year at $7 billion, is getting closer to an initial public offering after helping some of the biggest companies in the U.S. automate routine processes.

Armed with last year’s $568 million funding round that gave the New York-based company its multi-billion dollar valuation, co-founder and Chief Executive Officer Daniel Dines sees more growth on the cards. The bourse entry may take place as soon as early next year, depending on market conditions and strategic decisions.

“We just started our growth journey in 2016 and if you look at the average age of a company to do an IPO it’s probably 7 years, so there’s” no reason to hurry, Dines said in an interview from New York. “You have to become a public company at some point to allow your employees to get more liquidity, give them stock options. We’re almost there.”

Founded in Romania in 2005 as DeskOver and renamed in 2015, UiPath’s client base includes the CIA, the U.S. Navy, McDonald’s Corp, Duracell and Swiss Re. The company had $360 million in annual recurring revenue last year and it attracted funding from investors such as Sequoia, CapitalG, Wellington Management, Sands Capital and others.

“Even though UiPath technically can do an IPO, I think they don’t have to do that. They already got a huge amount -- $1 billion -- in venture funding and don’t have to get their hands tied up in the capital market.”

--Kathy Gao, a BloombergNEF analyst focused on the digital industry

UiPath’s software performs low-skilled and repetitive tasks once outsourced to humans in cheaper-wage countries, via “robotic process automation,” or RPA. Examples include the processing of applications for jobs, pensions or handling student data at universities.

UiPath, which became Romania’s first unicorn in 2018, competes with other software vendors such as Blue Prism Group Plc, Kofax, and Automation Anywhere Inc. Dines, who ruled out acquisitions in the near future, didn’t give financial details on UiPath’s potential IPO.

Blue Prism has already had an IPO, in which it raised about 21 million pounds ($27 million) in 2016. Blue Prism’s shares skyrocketed after its IPO while still unprofitable, and in 2019 it raised an additional 100 million pounds to fund its expansion. The U.K.-based company said last month that its investments widened its 2019 loss but would be showing returns this year, while its customer base was growing.

Virus Backlog

“We’ve seen increased competition, even Microsoft said they will come with an RPA solution,” UiPath’s Dines said. “This is a great validation for the industry.”

One key area to watch is the use of UiPath to help hospitals fighting the coronavirus to avoid backlogs and speed up diagnosis, according to Dines.

“RPA has become a really big and established sector and many companies have plans to implement it,” he said.

(Adds background on Blue Prism IPO in 8th paragraph. An earlier version of this story was corrected to remove an analyst’s characterization of its share sale process)

To contact the reporters on this story: Andra Timu in Bucharest at atimu@bloomberg.net;Irina Vilcu in Bucharest at isavu@bloomberg.net

To contact the editors responsible for this story: Andrea Dudik at adudik@bloomberg.net, Andras Gergely, Balazs Penz

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