Thread by @mariogabriele

$PATH lists today!

I think RPA can feel a little bit intimidating to newcomers, so I thought I'd put together a super-quick summary of the company.

UiPath in 3 minutes.

👇

TL;DR

- UiPath sells software "robots"
- It was started 16 years ago in Romania
- Its customers are usually big corporations
- It made $607M last year (+81% YoY)

readthegeneralist.com/briefing/uipath

History

- Founded in Bucharest by 2005
- CEO was a former Microsoft engineer
- Company was a devshop called "DeskOver"
- Pivoted to true RPA in 2013
- Only started scaling after that point

readthegeneralist.com/briefing/uipath

Market

- RPA market pegged at $5.4B
- Grew 63% btwn 2019-20
- RPA is a sub-category of "business automation"
- Business automation market pegged at $65B

Financing

Seed: $1.6M (took 14 months)
A: $30M
B: $153M
C: $265M
D: $568M
E: $225M
F: $750M at $35B val

Total of $2B raised. Key investors @EarlybirdVC, @CredoVentures, @Accel, @CapitalG, @AlkeonCapital, @seedcamp, @sequoia

Product

- Full suite RPA
- Makes it easy for businesses to automate tasks
- Usually boring, mundane stuff (filling in spreadsheets)
- Offers attended and unattended automation*

*Attended: someone has to trigger the bot
*Unattended: bot runs solo

Product differentiation

- Easy to use with a drag-and drop interface
- Good for coders and non-coders
- Free tier and "Academy" let people try before buying
- Truly horizontal platform; useful across sectors

Business model

- Mostly sells B2B2B, using channel partners
- Channel partners are consulting firms and BPOs
- They sell to the end-customer much of the time

Example:
$PATH sells software to Deloitte. Deloitte whitelabels it and sells it to JPM.

Revenue streams

- Selling software licenses (57% rev)
- Implementing software (4%)
- Maintaining software (39%)*

*RPA has been developing so fast that constant updates have been necessary. This might change as cloud becomes more important.

Financials
- Revenue growth LTM: 81%
- GAAP GMs: ~90%
- GAAP operating margins: 7%
- S&M spend: 63% total revenue
- DBNR: 145%
- Rule of 40: 85%

What does this all mean? $PATH is a great growth story. Does a good job of upselling. Spends too much on S&M.

Team

- CEO is Daniel Dines
- Dines has 88% voting power (!!)
- Dines has token compensation
- Quirky figure; though apparently highly intelligent
- Senior team has good enterprise software experience

Investing wins

Earlybird
- Owns 10.3%
- Worth ~3.6B based on last round
- 18x fund returner

Accel
- Owns 26%
- Worth ~9B based on last round
- 4.5x fund returner

Competition

- Direct: Automation Anywhere, Blue Prism
- Challengers: WorkFusion, Kofax
- Big Tech: Microsoft (offers RPA for free with Office)
- Insurgents: Alloy, Kissflow, Bryter*

Increasing pressure from verticalized offerings, and startups selling bottom-up.

$PATH threats

- Automation market is changing
- RPA is becoming outdated
- AI, ML, and cloud are more important
- UiPath has *some* offerings here; but limited
- Has made acqs to modernize (e.g.: Cloud Elements)
- Needs to make more

Valuation

- Last round at $35B
- IPO expected to be at $26B
- 43x LTM sales multiple (!!)
- Compare that to $CRM, $MSFT, $ORCL

Check out the full, free report for more:

- Includes +100 hours of summarized research
- Analysis from RPA experts
- More details on valuation

H/t @aashaysanghvi_ @jaminball @sharpshoot @lafillemouen @Jer_Diamond @AdrienCipel @dlwei17

readthegeneralist.com/briefing/uipath