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IPO UiPath: 5 things to know about a software robot company valued at nearly $ 30 billion


UiPath Inc. is launching their initial public offering at valuations close to what they would get from venture capitalists, with the help of the automation it happily calls a “part robot. soft”.

UiPath
ROAD

Create software that automates business tasks and sets it apart from competitors by allowing inexperienced employees to code customizing AI capabilities.

“These traditional automation solutions aimed at minimizing conflicts are often designed for use by developers and engineers, instead of employees directly involved in actual automated work. “the company said in a filing to the Securities and Exchange Commission.

“Our platform leverages the power of artificial intelligence or AI, based on computer vision to allow our software robots to perform a wide range of actions like humans,” the company said. when doing business processes ”. “These actions include, but are not limited to, logging into applications, extracting information from documents, moving directories, filling out forms, and updating information fields and databases.”

Late Tuesday, UiPath valued his IPO at $ 56 a share, raised over $ 1.3 billion and gave the company an initial market cap of $ 29.1 billion, low. than self-priced $ 35 billion after a $ 750 million venture funding round on Feb. 1. It is scheduled to begin trading Wednesday on the New York Stock Exchange under the ticker “PATH”.

UiPath Initially filed for IPO on March 26 with plans to raise up to $ 1 billion. The company is stuck with IPO plans like any other company Squarespace Inc., Coinbase Global Inc.
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Roblox Inc.
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and Palantir Technologies Inc.
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have selected a direct replacement list.

Initially, the New York-based company said it had registered up to 24.5 million shares, at prices ranging from $ 43 to $ 50 a share, to raise up to $ 1.22 billion. On Monday, it increased the range to mid $ 52 and $ 54 per share and increase the number of shares planned for sale.

Morgan Stanley, JP Morgan, B of A Securities, Credit Suisse, Barclays, and Wells Fargo Securities are among the underwriters.

Here are five things to know about UiPath:

The ‘humble’ company recorded rapid expansion

In S-1, UiPath CEO, Chairman and Co-Founder Daniel Dines wrote about his company’s core values ​​of “humility,” in which it allows its developers to listen. and quickly adapt to customer needs. Founded in Bucharest, Romania in 2005, the company was founded in Delaware six years ago after growing the word “10 people in an apartment in Romania,” Dines wrote.

“We went against the first rules of perfecting business models in one territory, and instead, we rapidly expanded globally at the same time to the United States, Europe and Asia”, CEO wrote in a letter.

With its current annual renewal rate, or ARR, of $ 580 million, UiPath identifies itself as “one of the fastest growing modern enterprise software companies ever”. ARR is a metric commonly used by software as a service companies to indicate the revenue the company can expect based on subscriptions.

While UiPath notes International Data Corp. Seeing the automation software market at $ 17 billion by 2020, which is expected to grow to $ 30 billion by 2024, the company says the “fully automated enterprise” software delivers giving it current market opportunities of more than 60 billion dollars.

The CEO holds most of the tokens

Since 2015, UiPath has raised around $ 2 billion in eight funding rounds, according to Crunchbase. That funding, however, doesn’t seem to buy much of the voting rights in the company.

UiPath Class B has 35 votes, while Class A stock – which is being offered for sale in the IPO – has one vote. The S-1 filing reveals that CEO Dines holds 100% of the Class B shares and 6.5% of the Class A shares, representing 88.1% of the voting rights.

The only entity close to that is venture capital firm Accel, which started building its shares in 2017 and now requires about 101 million Class A shares, or 24% of those shares, for 3.1% voting power. Earlybird Management, with 9.5% of Grade A shares, accounted for 1.2% of the vote.

The company has restrained the costs

For the 2021 fiscal year ending Jan. 30, the company recorded revenue of $ 607.6 million with a loss of $ 92.4 million, compared with $ 336.2 million in revenue with a loss of 519. , $ 9 million in FY2020. In 2018, UiPath reports FY2019 revenue of $ 148.5. million and a loss of $ 261.6 million.

As revenue increased 81% for FY2021, UiPath reduced sales and marketing expenses by 21%, research and development costs by 16%, and general and administrative costs by 10%.

There is no specific plan for the funds

If underwriters exercise all the stock options during the offering, UiPath is expected to reap a net amount of around $ 1.34 billion, based on a share price of $ 56. . With approximately $ 357.7 million in cash available on books as of Jan. 31, the company doesn’t set aside funds for any particular use.

“As of the date of this prospectus, we cannot ascertain all specific uses for the net proceeds from this offering,” the company said in its 19-month filing. 4. “However, we currently intend to use the net proceeds we receive from this offering for general corporate purposes, including working capital, operating costs and capital expenditure. “.

COVID-19 has promoted a diversified customer base

As of Jan. 31, the company claimed to have close to 8,000 customers, with 63% of them in the Fortune Global 500. About 1,000 of those customers accounted for more than $ 100,000 ARR per person, UiPath said. The company highlights clients like Adobe Inc.
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Applied Materials Inc.
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Chevron Corp.
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Chipotle Mexican Grill Inc.
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CrowdStrike Holdings Inc.
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CVS Health Corp.
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and Uber Technologies Inc.
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This compares to the 700 customers the company claimed in 2018.

The company’s current customer base was spread out enough that one client couldn’t make a significant drop in sales. “No customer or channel partner accounts for more than 10% of our revenue through January 31, 2021,” according to S-1.

Meanwhile, the COVID-19 pandemic has helped. On January 31, 2020, the company said it had around 6,000 customers, so during the pandemic year alone, UiPath increased its customer base by 33%.

“As the pandemic continues, the global demand for automation continues to accelerate as automation becomes a necessity for doing and doing business in remote work environments,” UiPath said. .

“Although the pandemic may have accelerated the adoption of automation, organizations need to deal with extraordinary cost pressures, maintain and grow revenue, and adapt to increasing demand. The ultimate customer development exemplifies the endurance of digital transformation needs and the resilience and power of automation even in the toughest of times, ”according to the company.

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