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The first unicorn effect: What has been the impact of UiPath on the Romanian innovation ecosystem?

the first unicorn effect UiPath
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UiPath is the first unicorn in software technology born in Romania and, as such, has left an undoubted mark on the country’s tech innovation and startup environment. The extent of this impact remains to be fully experienced as the vibrant tech scene in the country continues to develop, yet signs are already here.

Daniel Dines, returned to his home country after his work at Microsoft in Seattle to start an entrepreneurial journey. Alongside Marius Tirca, they tested multiple product ideas before hitting the jackpot with a robotic process automation product. Today, UiPath is the market leader in the RPA industry, one of the fastest-growing markets in the global enterprise software segment and recently filed for an IPO. The company’s private market value has reached $35B after a Series F round of funding of $750M.

With about 8000 customers worldwide, including over half of Fortune Global 500 companies and eight of the top 10, the firm just hit $580M in annual recurring revenues. And even though the company’s headquarters were moved to New York in 2017, UiPath keeps a strong presence in Romania, including a quarter of its employees.

Overall, we can best quantify the impact of UiPath in the local innovation ecosystem through the funding the company attracted in several rounds from local and foreign investors, as well as the recent boom in the local startup ecosystem.

Growing demand and investment in the automation software market

Since its founding, UiPath received several international recognitions, starting with the fastest growing technology company in the Americas according to FT ranking, as well as in North America by Deloitte. Just recently, it was included on the CNBC Disruptor 50 list.

Yet the biggest vote of confidence is the strong interest shown by local and international investors. In April 2017, UiPath organized the first financing round and attracted $30M from Accel Partners. Back then, the company was valued at only $109M. By 2018, after another financing round of $30M from Accel Partners, CapitalG (investment brand of Alphabet), and Kleiner Perkins Caufield & Byers, the company’s valuation rose tenfold to more than $1B, becoming the first unicorn founded by Romanian entrepreneurs. 

Last year, UiPath, having received a new $225M investment, was valued at $10.2, essentially becoming a decacorn. Fast-forwarding to March 26th, 2021, the company has announced filing for an initial public offering (IPO), with an initial, temporary goal of raising 1 billion dollars, although the share price has not been announced yet. This goes to show the market’s increasing demand for robotic automation software, alongside and often intersected with artificial intelligence and cloud computing. 

There’s no denying that automation has become a strategic imperative that can change how organizations work. UiPath has an ideal position to influence the digital transformation of organizations in the local, as well as the global ecosystem. 

And companies are not the only customers. UiPath has already had a promising start in helping the Romanian government to automate digital processes. Although e-government is well underdeveloped in the country compared to other European states already using RPA and artificial intelligence to increase efficiency and transparency of public services, UiPath has given the country a substantial competitive advantage.

For instance, ANPIS, the Agency for Payments and Social Inspection, was the first public institution in Romania to benefit from RPA unicorn’s experience in the market. In March 2020, the company offered free licenses for software robots and pro bono technical support, assisting ANPIS in averting a crisis in data requests.

“We are proud that we were able to support ANPIS’s approach to intervene for vulnerable citizens during this period. Software robots have never had a more important mission, and their intervention, as well as the collaboration between the private sector and public institutions, are critical now, but also in the next period, when companies and economies will start the post-pandemic recovery strategy, ”Razvan Atim, General Manager for Eastern Europe of UiPath, mentioned in an interview for cursdeguvernare.ro.

As an end goal, UiPath wants to expand and democratize the adoption of automation. In Мay 2020, the company announced launching an end-to-end hyper-automation platform, which uses process discovery tools and employee crowdsourcing to determine what to automate. 

On its journey, the company has already attracted local partners. Most recently, they announced a collaboration with KPMG Romania to develop and deliver intelligent automation solutions using the consulting company’s implementation expertise and UiPath’s agile and scalable automation platform.

Inspiration to the local startup environment

Since UiPath has taken off in the market, the Romanian startup ecosystem has seen accelerated growth. The boom is also in line with regional trends, Eastern Europe representing the second most attractive region for global investment. 

The most successful year to date has been 2019, when the local startup ecosystem grew 20 percent compared to the previous year, including through a second Series A investment after UiPath, received by FintechOS. Other firms such as TypingDNA have also closed series A funding. Besides, the average investment in the financing round also increased by more than 20%, on account of many “Seed” type investments of over one million euros.

Bucharest, home to the most active startups, incubators, and accelerator programs, has been the main hub for attracting both local and international investment. A higher digital workforce and the spread of technology companies are key advantages for the capital in nurturing startups.

Overall, there are more and more programs aimed at supporting the startup ecosystem, with a key focus on technology. For instance, UiPath has been hosting the Automation Awards since 2019. The competition mentors, trains and rewards the most promising emerging B2B software automation startups and scale-ups in the CEE region and Turkey. Aside from a cash prize of €50,000, companies in the program receive mentoring hours, as well as technical and marketing support from UiPath experts to develop new technologies and strengthen the regional ecosystem of automation solutions. 

Future impact

Further down the road, prospects are optimistic for both UiPath and the overall innovation ecosystem in Romania. The first national unicorn has recently surpassed OMV Petrom as the highest value company in the country. In the longer term, this strengthens the influence and growth potential of tech on the overall market.

What started as the vision of two Romanian entrepreneurs to increase efficiencies in the business environment has been a key driver of automation through RPA and artificial intelligence. Big tech companies, such as SAP, Microsoft, and IBM, already seek to expand their portfolios through automation technology providers. 

However, its founders expect the impact of RPA to go even further, influencing education and professional development worldwide, as professional organizations launch specialized certificates required to build expertise in the market and educational institutions introduce new, automation-focused curricula.

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Antoanela is an Innovation Reporter at The Recursive with a knack for sustainability and environment protection. She is on a mission to communicate and celebrate innovative ideas and solutions that improve our ability to thrive together on this planet.