Understanding UiPath’s plummeting valuation – Marketingwithanoy

A little over a year ago, UiPath was one of the most favored startups in the world. Last February, the company raised a massive $750 million round at a staggering $35 billion valuation. The robotic process automation, or RPA business, fired on all cylinders.

By the time UiPath went public in April of last year, the final private price was looking a little, well, pricey. The company’s early IPO price range was below its latest valuation, but after increasing that range and the price above it, the unicorn was still valued with a modest shortfall to that $35 billion mark.

However, during the first day of trading, the company managed to hit the price set by its three-quarter billion dollar round. Marketingwithanoy spoke to the company’s CFO about his method of going public at the time and the timing of his debut for more context; the executive praised its ability to attract new investors in a traditional offering, rather than the trendier direct listing option.

UiPath’s value skyrocketed to a whopping $90 a share, bringing the valuation to about $43 billion per YCharts data.

However, things have gone badly for UiPath since then, at least in terms of rating. The company fell more than 3% to $18.29 a share Friday afternoon, pushing its valuation below $10 billion. From piping hot unicorn to uneven IPO, to strong early trading, to a painful descent – what went wrong with UiPath?

Marketingwithanoy has two hypotheses: the first is that the company simply got caught up in a broad re-pricing of technology revenue by investors in the public market; this isn’t a new story, and if it explained the UiPath valuation declines, the tech company would be in good company. However, there may also be a technology-related explanation at play. And of course, both factors can play a role at the same time.

To understand what may have happened to UiPath’s disappearing valuation, let’s talk the numbers first, then talk the technical side of the coin!

Was UiPath just hit by the tech re-pricing of the market?

UiPath continues to be a company on the move. In the fourth quarter of its fiscal 2022 — the three months ended January 31, 2022 — the RPA market leader reported $289.7 million in total revenue and a quarter-end annual recurring revenue (ARR) of $925. .3 million. From those data points, you can see how public markets have changed their minds about the value of software revenue.

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