I’d like to bring a company to this board that recently confirmed its upcoming IPO within the next couple of months – UIPath (PATH).
Description: UiPath provides robotic process automation (RPA) software. RPA is a way to configure software to complete actions with minimal input from the user (think of an Excel macro that can execute actions across your apps – not just within Excel). The simplified value proposition’s is that implementing RPA allows humans to spend more time doing valuable tasks, while reducing costs.
Market & Competition: The RPA market was estimated to be ~$5B in 2019, and is expected to top $12B by 2023 (expanding at 24% CAGR) according to Forrester. While the market is very saturated (200+ RPA companies), the largest 3 players (UiPath, BluePrism, and Automation Anywhere) control ~30% of the market. On Forrester’s latest assessment, UiPath was named the leader, with the strongest current offering and the strongest strategy. UiPath was also named the leader in its ability to execute by Gartner, although its completeness of vision was slightly lagging a few players. Similar results were found by Everest Group.
Leadership: UiPath is lead by founder CEO Daniel Dines. Born in Romania (where UiPath launched), Daniel self-taught himself coding until he received an offer from Microsoft which led him to relocate to the US. After a few years, he relocated to Romania to launch his first company (DeskOver) which eventually pivoted to become UiPath. After reaching $500k in revenue in 2014, he raised $1.6M from European VCs and began scaling UiPath to the multinational leader that is now. They’ve recently recruited a strong addition of board directors with enterprise SaaS public market experience, including Dan Springer (Docusign CEO) and Jennifer Tejada (PagerDuty CEO).
-7,968 customers including Amazon, Bank of America, Uber, and 63% of Fortune 5000
-1,002 customers with ARR > $100k ARR (up from 597 last year)
-89 customers with ARR > $1M (up from 43 last year)
-$608M revenue for their last fiscal year (+81% YoY, down from +126% growth the previous year)
-$580M FY21’Q4 ARR (+65% YoY)
-89% gross margins (up from 81% last year)
-145% dollar net retention rate (97% dollar gross retention rate)
-$26M in free cash flow (up from -$380M loss last year)
-$92M in net loss (down from $520M loss last year). Operating expense decreased all across the board, although S&M was the most notable decline
-The company recently raised $750M at a $35B valuation. Using their latest figures, it seems like they were valued at ~58 P/S (LTM). Assuming they grow at ~70% over the next year, that translates to ~34 P/S (NTM). That being said, we obviously don’t know how the market we react, or what the official offering price will be.
Conclusion: UiPath meets the criteria of many of the top companies discussed on this board. It continues to grow at hyper-scale, and has recently shown operating leverage. Questions remain regarding its public market valuation and quarterly growth rates (they’ll be revealed in an amended S-1 soon), but the purpose of this post is to initiate a discussion so that we can be prepared once it makes its public debut.
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