UiPath, which is a fast-growing enterprise software company, is likely to have a red-hot IPO this week. On Monday, the company increased the IPO range from $43-$50 to $52-$54 as well as the number of shares to be issued, with the figure moving from 21.3 million to 23.9 million.
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UiPath is one of the leaders in the RPA (Robotic Process Automation) market, which helps to automate and streamline tedious and repetitive processes. The UiPath platform is actually a hybrid of cloud solutions and Windows software, unusual for recent tech IPOs.
That said, the technology approach has been spot-on. The fact is that Windows is prevalent across corporate IT environments and allows for better integrations.
Bearing this in mind, let’s take a look at the company.
Background On UiPath
The founder and CEO of UiPath is Daniel Dines. He grew up in Romania and his family had little money, with Dines having to borrow a computer to learn programming.
Eventually, he would become one of Microsoft’s top coders from 2001 to 2005. After this, he launched his startup – which was called DeskOver—but it was a struggle to say the least. Dines focused on helping with integrations and outsourcing, which were highly competitive categories.
By 2015, the company was on the verge of going bust, but Dines saw an interesting opportunity in the RPA market – primarily because of feedback from a large customer in India.
This turned out to be transformative. Dines changed the name of the company to UiPath and growth surged, primarily because it was aggressively striking partnerships with consulting firms and BPO (Business Processing Outsourcing) companies.
What’s more, the company’s decision to make a free download of the software available greatly expanded the distribution and created an extensive academy to train programmers.
The Software And The Market
At the heart of the UiPath platform is a bot, which is a workflow of certain automations (think of it like a more sophisticated macro in Excel), allowing for quick and significant ROI (return on investment) for corporate deployments.
This has certainly been critical as companies have been pursuing digital transformation, but it has also been essential for navigating the COVID-19 pandemic. After all, companies have had to scramble to automate their systems to accommodate remote workforces.
It should be noted that UiPath has bolstered the capabilities of its platform with cutting-edge technologies like AI (artificial intelligence) and ML (machine learning). As a result, the system can identify areas for automation and provide for continuous improvement.
So, what has the growth been like? It has been impressive, given the company’s size. The ARR (annual recurring revenue) jumped by 65% in fiscal 2021 to $580.4 million and total revenues soared by 81% to $607.6 million. In addition, the company posted operating cash flows of $26 million.
Looking at its users, there are nearly 8,000 customers, including 80% of the Fortune 10 and 61% of the Fortune Global 500. Just to name a few, some of the customers are Chevron (CVX), CVS Health (CVS) and Uber (UBER).
The IPO
UiPath plans to offer its shares on the NYSE under the ticker symbol of PATH and the lead underwriters include Morgan Stanley (MS) and JPMorgan (JPM). The stock is expected to trade this week.
While the IPO market has been dicey lately, there appears to be a lot of interest in marque software companies – and UiPath definitely fits the bill.
Disclosure: Tom Taulli held no position in any of the stocks mentioned in this article at the time of publication.
Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.
