The race to automate the world of business is on, and today one of the bigger players in the market has picked up another major round of funding to meet that demand to speed up work, reduce some of the costs around repetitive procedures and perhaps gain some new insights in the process.
Workato, which has built a platform that lets organizations set up and run automated solutions to speed up repetitive processes in their workflows, has closed a Series E of $200 million at a $5.7 billion valuation. Workato said that it plans to use the funding to continue investing in its platform, and to make acquisitions, ahead of eyeing up an IPO down the road.
"It’s our plan to eventually go public, but there is no official timeline set," Vijay Tella, Workato CEO and co-founder, told TechCrunch. "Right now we’re focused on making Workato the company you think of when you think of Integration and Automation. We believe customers can benefit so much from wall-to-wall integration, and for that reason our goal is for our customer usage to continue to grow over time and to stay on the revenue path we are already on."
In line with that, along with the funding news, Workato is also disclosing an acquisition that it made with some of its funds: RailsData, a startup that has built API-based technology to integrate apps, data and devices. Workato had been a customer of Chennai, India-based RailsData prior to the acquisition, so it was already using the smaller startup's technology to power some of its own automation solutions, specifically for deploying services at scale, via APIs, for larger customers of Workato's.
Battery Ventures led this latest round, with Insight Partners, Altimeter Capital and Tiger Global also participating in equal amounts, the company said. Workato, which has now raised $421 million to date, has been more generally on a funding and growth tear this year: It was only in January of this year that the Mountain View-based startup had raised $110 million at a $1.7 billion valuation.
Part of the reason for the big valuation hike has been the company's growth. There are now a number of companies, including Salesforce's MuleSoft, UiPath, Boomi, ServiceNow, Tray.io, SnapLogic, Blue Prism, IBM and so many others offering different approaches to providing automation of one kind or another to organizations, and as the space matures we're even starting to see an increasing number of approaches targeting specific use cases and verticals.
Workato's pitch is that it has managed to bridge the gap between automation and the non-technical users who are most likely to want to use (and build robotic process automation and other workflow automation experiences using) tools like these.
It has some 500,000 "recipes" available for companies to use, covering operational areas like HR, marketing, sales, finance, IT, revenue operations and product (where its automations can be embedded into other services), and popular enterprise apps like Salesforce, Slack, ServiceNow, Snowflake and Workday. Even though a number of RPA and other automation vendors tout "low code" or even "no code" solutions aimed at non-technical people, the reality is that this is often not really the case.
"Workato has looked at the integration and automation problems differently, that they are two sides of the same coin," said Tella. "Today integration tools like iPaaS, ETL/ELT and API management are focused at data level and don’t do end to end process automation or workflows. Tools like RPA and BPM approach the problem from a business process perspective but lack a strong foundation of connectivity or integration leading to brittle, hard to implement and change workflows.
"We see business processes as inseparable from underlying data," Tella continued. "Workato’s automation is built on a foundation of industry-leading iPaaS or integration. Integration or data is where the rubber meets the road and automation is how the work gets done. We uniquely do both in one platform. A Workato recipe is a single concept that handles both data and process-level integrations. It is not a Swiss Army knife of integration and automation technologies under the cover." The idea is that this approach works both for non-technical business teams as well as IT teams.
The company says it has some 11,000 businesses as customers, with the list featuring a heavy dose of tech companies as well as non-tech ones. It includes Atlassian, AT&T, Adobe, Autodesk, Box, Stitch Fix, GitLab, NYU, Nokia, Lucid Motors, Broadcom and Toast.
Workato quoted 7,000 customers in January, and the company's annual recurring revenues have more than doubled in the last year. It seems to have gotten deeper engagement with its customers, too, with users growing to 100,000 from 70,000 in January. Its biggest verticals currently are Technology, Financial services, Retail, Logistics & Transportation, and Healthcare, said Tella.
One of the big trends, of course, in enterprise IT in the last two years has been "digital transformation" and specifically modernizing systems to cope with the fact that we are working differently now because of COVID-19, and consumers are demanding different things from the organizations they engage with. That's been a big reason that investors are interested in the company.
“The events of the past 10 months have made operational excellence more critical than ever, and businesses understand that enterprise automation is a cornerstone to achieving the heightened agility, innovation and performance they need to succeed in any environment,” said Pauline Yang, partner, Altimeter Capital, in a statement. "The market for automation products will only continue to expand, and we believe that Workato has the best technology, partnerships and leadership team in place to capitalize on this exciting opportunity.”
Tella notes that Workato's approach has been one of the more uniquely scalable, due to how it has been built.
"The scale and scope of sales, marketing, finance, HR, customer and other operations today mean 10,000 salespeople in 10,000 companies are not reinventing the same wheel," he said. "This is untenable, unproductive and results won’t be great." He notes that Workato’s recipe builder is AI-powered "so it recommends next steps and helps you build the right recipes by default."
He describes the 500,000 community-created recipes as "a GitHub for automation and operations" for users to find, one automation and adapt it to their own companies and use cases. "This is built on Workato-patented cloning technology that makes it possible to reuse recipes created in a different company with apps like Salesforce that are customized very differently than your own. A template model does not work for reuse."
The company's big opportunity in the coming years will be to tap into a global demand for more automation tools. Workato plans to add a new data center in the Asia Pacific region to complement the business its already in there; and it will be bringing on more firepower also in the EMEA region, alongside more growth in the U.S.
Battery is a repeat backer of the company, giving it perspective and an insider's view of how Workato has grown.
“Since leading Workato’s Series B in 2018, we’ve been excited to see the steady growth of usage among Workato’s customers—many of them leaders in their respective industries—and Workato’s solidifying position as a leader in the automation market, one of the fastest-growing sectors in technology,” said Neeraj Agrawal, a general partner at Battery Ventures, in a statement. “We’ve had a front-row seat to watch Workato truly transform many of its customers’ businesses, which is one reason why we and other existing investors in the company are excited to lead this new funding round.”
Updated with new figure on total customers to 11,000 from 7,000.