Hyperscience Raises $60M Series C To Become Automation Software’s Next Breakout
Forbes / 06.04.20
Forbes / 06.04.20
“Peter Brodsky was running an engineering team at SoundCloud in 2013 when he first got the urge to automate away some of his job. A machine learning expert, Brodsky spent hours inputting and processing data so it would be ready to use by SoundCloud’s more powerful algorithms that could classify songs and recommend them to listeners. “We wanted to automate our old jobs away,” Brodsky says. “Before we ever got the chance, we discovered that what we were doing through code, larger organizations were doing by hand.”
The following year, Brodsky and two of those engineers cofounded Hyperscience, a startup in the automation space that works with – and presents a potential future challenge – to a buzzy category of software called robotic process automation, or RPA. Six years later, Hyperscience is emerging as one of the higher-valued enterprise startups in the New York tech ecosystem. The company announced on Thursday that it raised $60 million in a Series C funding round led by Bessemer Venture Partners. Hyperscience didn’t disclose its valuation, but the investment likely values the startup at more than $250 million.
Software that can scan forms and clean up data is far from new. The RPA category, which addresses the problem through programmable “robots,” code programs that can carry out a repetitive task in place of a human, has supported a public company with a market capitalization over $1 billion, Blue Prism, as well as several startup valued at or near $7 billion, Softbank-backed Automation Anywhere and UiPath, a New York-based business founded out of Bucharest, Romania. In May, Microsoft acquired a smaller RPA player of its own called Softomotive.
Hyperscience partners with several of those players, including Blue Prism and UiPath, but ultimately it’s competing for the same business: the back-office type work processes that are essential to businesses, especially larger ones, but that don’t contribute to their core product. That can include processing insurance claims and enrollments in programs, mortgage applications and the myriad forms required for confirming, tracking and processing receipts and invoices with business vendors. Like the RPA leaders, Hyperscience has found demand in industries like financial services, where it counts TD Ameritrade and Fidelity as customers, as well as insurance, retail, logistics, healthcare and government.
What Hyperscience does that RPA companies do not, its CEO claims, is rewrite and improve the business processes themselves. RPA software essentially adds a layer of code that stitches together different systems to make them automatable, says Brodsky; Hyperscience’s approach, which it calls software-defined management, can detect the best process that would lead to a certain outcome, even if no human has yet put it in place. “RPA faces an existential threat form the fact that they have hitched their wagon to a legacy star,” Brodsky claims. “With or with us, legacy systems will inevitably die out; that’s what legacy systems do. We want to help businesses define their business processes the same way that they write software.”
With the new funding, Hyperscience, which has 145 employees in offices in New York, Sofia, Bulgaria and London, has now raised $111 million from investors including Tiger Global, Stripes Group, FirstMark, Felicis Ventures and now Bessemer. At Bessemer, partner Elliott Robinson says the hope is that Hyperscience can do something RPA hasn’t easily achieved: create systems that known when to loop in humans and when to leave them out of a process, in a way that doesn’t require a heavy touch from outside business analysts. (RPA players like UiPath have grown so fast in part because of partnerships with the world’s largest consulting firms, who can make more money per contract than the software provider to set up and manage its bots.)”