When robotic process automation company UiPath filed to go public in March 2021, the startup had just closed a $750 million round that helped it clinch a $35 billion valuation.
Although its initial IPO price range was slightly below that figure, post-debut, it bounced back to a $43 billion valuation at $90 per share.
As of this writing, however, UiPath is trading at $18.36 per share.
A year ago, “RPA was the fastest-growing area in enterprise software,” wrote Enterprise Reporter Ron Miller at the time. The sector was “growing at over 60% per year, and attracting investors and larger enterprise software vendors to the space.”
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Last quarter, UiPath grew its revenue by 39%, so “the company fits neatly into the high-growth SaaS bucket,” wrote Ron and Alex Wilhelm. Even so, its valuation has plummeted to just under $10 billion.
To better understand this reversal of fortune, they looked at declining revenue multiples for SaaS companies and took a closer look at the RPA market to see whether the sector still has as much potential as many believed.
“They are the strongest company in the segment and well financed in this growing market,” said Forrester analyst Craig Le Clair.
Did UiPath’s valuation get hit by the same shrink ray affecting other software companies, or are other factors at work?
According to Ron and Alex, “the case of UiPath … is slightly hard to grok.”
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Expand outside your install base.
Develop new products.
Help users understand the product.
Be 10x better.
“If you really want to take down the 800-pound gorilla, you need to make a product that is significantly better,” said Pezeshki.
“And all of the things that we’ve talked about prior to this one point kind of lead to this ’10x better’ concept.”
Here’s a full transcript of their presentation and the audience Q&A session.