Mobius & UIPath take off – Our Thoughts

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UIPath IPO

Mobius & UIPath take off – Our Thoughts

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last updated:

All in all quite month of activity, but all of course, overshadowed by the UIPath IPO. It will be interesting to see how this impacts the enterprise automation market in the short and long term. Undoubtedly some of the money raised, possibly much of the money, will go toward multiple acquisitions.

This past month, there were many deals in the market that caught our attention, both big and small. ASG, best known for its Mobius archive system, was acquired by Bain-funded Rocket Software and UIPath IPO’d on the NYSE with a staggering valuation of around $35B. Let’s take a look at UIPath first.

Well, fair play to the company for such a successful launch, and clearly, enterprise automation is in vogue. But when you consider that the entire RPA market is worth less than one-tenth of UIpath’s valuation, it makes you stop and wonder if the world has gone topsy-turvy. RPA is an essential component in automation, but the keyword here is component, and despite the hype adding some AI to the equation still doesn’t square the circle. Veteran process management player Pega has a market cap of around $11B on revenues of about $1B. That may seem an unfair comparison as Pega has been around since 1983, but that is the point, process automation is not new it’s a critical component in many enterprises, but it can be a tough sell. UIPath has revenues of approximately $608m and a net loss of $92m. The growth that investors seem to be banking on for enterprise automation appears to be huge, arguably without precedent. At Deep Analysis, we don’t advise on stock investments, we are interested in the market as a whole, and all I can say is this is mind-boggling.

At a more digestible level, the proposed acquisition of ASG by Rocket Software seems logical and sane. ASG has been doing a lot of work over the past few years to modernize a legacy business, and it joins with a firm with deep and broad experience in data & IT legacy management. So not an exciting or eyebrow-raising deal by any measure, but one that makes perfect sense. Under the radar (and we may have missed some), we saw:

  • Web content management vendor Crownpeak buys its fellow WCM traveler eSpirit. 
  • Xerox acquires Canadian document services firm Groupe CT
  • Component Content Management vendor Orbis bought InfoPros
  • Litera bought DocsCorp
  • PDFTron bought Windward
  • DocuPhase & Clearwater Payments
  • IBM spun off Breakwater Solutions (StoredIQ)
  • WalkMe bought enterprise search vendor Zest
  • ServiceNow bought RPA vendor Intellibot

All in all quite month of activity, but all, of course, overshadowed by the UIPath IPO. It will be interesting to see how this impacts the enterprise automation market in the short and long term. Undoubtedly some of the money raised, possibly much of the money, will go toward multiple acquisitions. But it will also unquestionably further fuel discussion as to just how big a role RPA plays in enterprise automation. Can RPA firms move from the job of simply automating repetitive tasks to much more sophisticated and wholescale, intelligent automation? Or as our peers like to call it, hyper-automation. We know for sure that Cognitive Capture is a growing market, and tools such as OCR often go hand in hand with RPA, so there may be more shakeups here too. We also know that RPA technology is now being bundled essentially as free functionality in more extensive product offerings. Microsoft, for example, provides Power Automate as part of Windows 10, and we know of other software firms planning to bundle RPA as a free service in their applications. Interesting times for sure!

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