Today, we announced our Series E funding in which we raised a round of $200M at a $5.7B valuation to accelerate our leadership in Enterprise Automation. It has been an incredible journey being at the front of this next wave of automation with our customers and partners, and we are excited to see what the next year will bring.
Connectivity is where the rubber meets the road for our customers. Their first question is often “Can you work with all my applications?” Workato is the leader in integration with support for the most number of applications, over a 1000, in the market today.
The team from Railsdata, a company dedicated to creating business applications connectors, will be joining Workato to help us scale this up to 10,000 in 18 months. There’s no end in sight of the best-of-breed movement and comprehensive support for all the applications or data sources customers use – on-prem or cloud, bespoke or packaged will be even more critical going forward.
It’s a big round, raising the question: Why add another $200M when we still have over $160M from the prior rounds? And why so soon when we did our series D just 10 months ago? To answer this, let’s take a closer look at the last year in the automation market.
The eruption of the automation market
Enterprise Automation is a market opportunity north of $100B, the largest in enterprise software today. The automation market has experienced serious change in the last 12 months with a number of IPOs and acquisitions. Since our series D round, we have experienced startling growth that is accelerating every quarter even as the base of our revenue has well over doubled. It’s an exciting time. We’ve taken our series E to continue leading the new wave of automation that is emerging in the market, evidenced by our customers as well as the activity in and around our space.
Automation and robots are a hot topic, especially in the news. But the popular automation narrative today – focused on efficiency, mainly by replacing human workers – is limiting and seems out of step with what we see our customers accomplishing with Enterprise Automation. Throughout history, automation technologies transformed human experience at a fundamental level. Similarly, facing seismic changes in their markets and customer expectations, companies feel an urgent imperative to transform themselves at a fundamental level today.
Reflecting on the broader automation market today, I see three waves of technology. Most companies are automating tasks or orchestrating individual processes, but some companies are unlocking the awesome potential of transformation with the third wave – automating processes end-to-end across the enterprise.
The 1st wave — Automation
Automation has meant many things, yet today, it seems to mainly mean replacing human work with software bots to reduce costs. It’s a limited and somewhat depressing view. In the enterprise software market, this view is most closely reflected in the value proposition of Robotic Process Automation (RPA).
Yet for centuries, automation revolutions have transcended efficiency to elevate human experience and establish completely new paradigms. For example, it was the invention of recorded sound (not the player piano or robot violinists – the musical equivalents of RPA bots) that automated and transformed music.
At the time, 19th century elites worried recorded sound would make musicians obsolete, pollute culture, and ruin art. Today, the RIAA estimates music contributes $170B annually to the US economy and supports over 2.4 million jobs. Spotify offers over 70 million songs. The average person spends over 30 hours per week listening to music. Recorded sound became a platform for untold technological innovations – from radio to YouTube. What a transformation of the human experience!
The big paradigm around automation today is one of software bots that mimic human keystrokes. These bots, unlike robot violinists, are also brittle and insecure, requiring constant upkeep. This approach, while reducing people related costs, cements the current ways of doing tasks in place. It’s the opposite of innovation or transformation.
The 2nd wave — Orchestration
If we look beyond tasks, a 2nd wave of automation software emerges that focuses on orchestrating business processes end-to-end to improve overall operational efficiency of the company and provide better end-to-end visibility in how work is getting done.
Today, our companies are no longer differentiated by apps we purchase. CRMs, ERPs, and other apps are table stakes. What sets our companies apart today is how we make apps work for us. It is what we do with and across those tools that determines our success. Business operations or Ops roles have sprung up across companies in nearly every function as teams wrestle with orchestrating data, processes, and people within teams and across teams. For example, Revenue Operations orchestrates all the processes that are in the path of revenue and touches various organizations – like marketing, sales, partners, customer success.
To orchestrate these processes end-to-end, businesses have been using a variety of technologies: iPaaS for application integration, ETL/ELT for data integration, BPM for process automation, chatbots for human interactions. On their own, each tool provides a piece of the puzzle.
However, fragmentation is not solved with more fragmentation. Fragmentation is only solved with a single platform that is able to orchestrate processes end-to-end across the entire enterprise – and that is where Workato comes in.
The 3rd wave — Innovation
*Picture inspired by McKinsey’s 3 horizon model
The pandemic forced many companies to rethink the status quo. It busted the inertia around digital transformation. We all realized that we needed more than organizational efficiency – our companies needed to get creative and adapt quickly and strategically to changes in our business environments. For many organizations, it was a choice of transform or perish. This leads to the third wave of automation – Innovation. This is where a company breaks free and reaches their full potential.
Third wave builds upon a foundation of orchestration and comprehensive connectivity. This wave:
- Is low-code/no-code, so business users and not just developers can orchestrate end-to-end workflows
- Empowers business teams that know the business process to collaborate and automate at scale with IT, who already knows how to scale, ensure performance, and be secure
- Comes natively with a community of pre-built automations so people don’t have to reinvent the wheel for their key automations, such as lead conversion.
- Leverages AI/ML for (a) rapid adaptation and even complete redefinition of these processes, and (b) making their process intelligent by tapping into various AI services, like IBM Watson, Salesforce Einstein, Google Vision, and c) via recommendations, helps create better automations by default.
- Works like a SaaS app like Salesforce. There is nothing for customers to install or operate, eliminating most of the operational costs and complexity of traditional tools.
The keys to innovation are an organizational “growth mindset” and our ability for the whole team (business groups and IT) to rapidly ideate and adapt confidently to changing business conditions. The impact of this third wave of Enterprise Automation platforms is transformational, and this is the platform we set out to create eight years ago.
The not-so secret recipe to our growth
Workato’s founding vision has always been to be the Enterprise Automation Platform that enables companies to orchestrate data, processes, and user experience across the entire enterprise. Recipes are the universal language for this orchestration.
It is gratifying to see how our customers are achieving goals of Enterprise Automation that are grounded in business outcomes like higher % of straight-through riders, better revenue conversion, higher NPS, shorter days sales outstanding (DSO), reduced employee attrition – and not just in hours saved.
Our vision of creating an Enterprise Automation solution as a single platform to orchestrate data, apps, processes, and people on a foundation of integration is coming into focus for customers and the market broadly. The accelerating M&A activity recently (UIPath’s acquisition of integration vendor Cloud Elements, Blue Prism’s merger with TIBCO, Mulesoft’s acquisition of RPA vendor Service Trace) reflect the customers’ need for speed, simplicity and a holistic approach to integration and automation, but they do not deliver on it.
Like recorded music, Enterprise Automation is a new creative medium. Recipes are the symphony score – a score that can be collaborated upon across the company and is improved upon constantly. Rather than focusing on just efficiency and lower cost, companies are recognizing that Enterprise Automation is a greenfield opportunity – a chance to get creative, try to bring all things together, iterate quickly, and drive growth in new ways – ultimately becoming unstoppable.
All of this has been driving extraordinary growth in our product and in our business this year. Companies are getting fed up with complexity and fragmentation of the first and second wave of automation platforms. With nearly every company needing to innovate and transform themselves at a faster speed, Enterprise Automation is the next big frontier of enterprise software. We raised this round to accelerate this journey: for customers, for partners globally, and the continued development of our platform. Again, we are incredibly grateful to our customers and partners who have inspired us to be our best.