The UiPath logo
No details of UiPath’s target pricing or capital raise have been disclosed © Alamy

UiPath, a maker of workplace automation software that was founded in Romania, is on course to be the biggest new business software listing since Snowflake’s blockbuster debut in September.

UiPath unveiled its plans for an initial public offering on the New York Stock Exchange on Friday, barely two months after raising $750m in a round that valued it at $35bn, including the new capital.

The company uses computer vision and artificial intelligence to automate routine and repetitive business processes, from extracting data from documents to filling in forms. Its technology promises to “augment and empower” knowledge workers in finance, sales, HR and legal departments.

“Our platform is designed to eliminate the need for employees to execute low-value, manual tasks, freeing up time to focus on more meaningful, strategic work,” UiPath stated in Friday’s S-1 filing. “Society is at a turning point in how organisations execute work, and we believe the ability to leverage software to enrich the employee experience will unlock tremendous value and efficiency opportunities.”

No details of UiPath’s target pricing or capital raise have been disclosed. But with February’s valuation probably providing a floor for its prospective pricing, the IPO will provide the biggest new test of investors’ appetite for fast-growing but lossmaking software companies, after a rocky start to 2021 for last year’s high-flying tech stocks.

Cloud computing company Snowflake’s shares doubled on their first day of trading in September to become the largest IPO ever for a US software firm. But Snowflake has fallen more than 42 per cent since its high point in December, to value the company at $64bn on Friday.

Daniel Dines, UiPath chief
Daniel Dines, chair and chief executive of UiPath © Noam Galai/Getty

Friday’s filing revealed that UiPath’s revenues grew by 81 per cent to $607.6m in the year to January 2021, while net losses narrowed from $519.9m to $92.4m.

The pandemic “may have accelerated the adoption of automation” as more companies were forced to work remotely, UiPath said. Its sales and marketing expenses fell last year as it postponed physical conferences and other travel. After cutting hundreds of jobs in 2019, the company also reduced executive salaries for three months last year as the pandemic began.

UiPath was co-founded by its chair and chief executive Daniel Dines, a former Microsoft engineer, in Bucharest in 2005. Its headquarters moved to New York in 2017. Dines’ letter to prospective investors describes how the company went from “10 people in an apartment in Romania in 2015” to operating in almost 30 countries today.

In common with other tech listings including UK-based Deliveroo, UiPath will retain a dual-class share structure, giving Dines more than 50 per cent of voting power. Other big investors ahead of the IPO include venture firm Accel, with 29 per cent of the class A shares, Earlybird with 11 per cent and Alphabet’s CapitalG with 8 per cent.

UiPath competes with rivals including UK-based Blue Prism and SoftBank-backed Automation Anywhere in a corner of the business software market known as “robotic process automation”. Microsoft has also sought to expand in the field, acquiring RPA company Softomotive last May.

While UiPath’s “bots” can cost a few thousand dollars a year in licensing costs, they are typically far cheaper than the back-office workers whose routine jobs they aim to replace or redeploy. UiPath now has almost 8,000 customers, including 63 per cent of the Fortune Global 500. Named customers range from tech companies such as Adobe, Uber and Autodesk to Toyota, Bank of America, EY and CVS Health.

Despite its focus on back-office automation, UiPath’s filing revealed that its own finance department had previously struggled with certain accounting issues. It disclosed a “material weakness in our internal control over financial reporting”, dating back to 2018, resulting in “the improper allocation of stand-alone selling price and certain errors in deferred revenue and contract assets”.

It blamed the problem on “a lack of oversight and technical competence and experience within our finance department to identify such errors” and said the issue had been “remediated”.

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