A Silicon Valley company that uses bots to automate certain tasks previously done by human workers has reached a $1.8 billion valuation with a new fundraising from several companies, including Goldman Sachs.
San Jose, California-headquartered Automation Anywhere this week announced a $250 million round of fundraising — its first round of outside funding despite being in business for 15 years.
It's a sign that automation has reached an "inflection point, a tipping point" Mihir Shukla, co-founder and CEO of Automation Anywhere, tells CNBC Make It.
First, consumers are demanding faster service than ever before, Shukla says.
“The demand for automation is growing quickly. ... The digital native companies — the likes of Google and Uber and Netflix and Amazon and others — have created a new standard of instant customer gratification. And now we expect it from every company that we are customer of,” Shukla tells CNBC Make It.
“And you can only deliver that if you have automation as a key strategic driver in your business. That is the only way for businesses to compete.”
Additionally, technology has developed enough so that bots can now take over simple tasks from humans.
“This is a historic point, a historic moment in our life that this is now possible. More importantly, that is the way to think about this — where it is a turning point or an inflection point, a tipping point, when now this is possible,” Shukla says.
Automation Anywhere's software allows bots to work alongside humans and do “repetitive work” while “dramatically reducing” costs for the client, the company says in a written statement. (Its customers — which spread across the financial services, insurance, health care, technology, manufacturing, telecom and logistics industries — include Google, LinkedIn, Cisco, Mastercard and Comcast, according to the company’s website.) The bots make each individual worker more productive, explains Shukla.
“This is about not job replacement but job augmentation," he says. "The best way to think of it is what computers are doing to us. When computers came to the workplace, there was the same discussion happening: How many jobs it would take away? Obviously certain jobs have gone away, but for most of us, if I take away your computer, you would say, 'How do you expect me to do my job?' Right? It has become an integral part of an augmented job for us," Shukla tells CNBC Make It.
"So that is the same way to think about the bots. Bots will work side by side people doing what they do best and allowing people to do what they do best. And it is an augmented workforce that will take us to the next, higher level of productivity."
The robots, which use machine learning and artificial intelligence, have “near-zero error rates,” the company says in a written statement. Tasks to which bots are well suited include moving data from one screen to another, data collection, data verification, reconciling data or invoice processing, explains Shukla. Currently, "hundreds of thousands of human workers" are "manually" doing these tasks, Automation Anywhere estimates.
Automating rote tasks will allow professionals to focus on more complex tasks, which Shukla says is a net positive.
"For instance, in my career, I have seen that practically every time an opportunity arises to solve a problem, people are too busy doing routine things to seize the moment. Their time and attention are taken up handling tasks that don’t create the most value. Automating the routine tasks, many of which are done by hundreds of thousands of people, gives humans time to focus on problem-solving and progress," Shukla says in a post published Monday. "When you free people from the mundane and refocus them on essential tasks, you begin to leverage and expand human intellect, and automation technologies help you do that."
“Certain work goes away but the jobs don’t go away," says Shukla.
A December 2017 study from the McKinsey Global Institute seems to support that. By 2030, 75 million workers around the globe will need to change occupational category due to automation, according to the report, and 400 million individuals could be potentially displaced and need to find new jobs, the report finds. These estimates are based on a midpoint rate of adoption of automation.
But the study found that overall, few jobs are going to be entirely replaced by automation — most jobs will change and there will also be entirely new job categories. According to the report, less than 5 percent of jobs consist entirely of tasks that will be fully automated; in about 60 percent of jobs up to one-third of tasks could be automated; and 8 to 9 percent of 2030 labor demand will be in new types of occupations that have not existed before. The McKinsey Global estimates are based on analysis of 46 countries that include 90 percent of global gross domestic product and a midlevel pace of adoption of automation.
Some, however, like Elon Musk and Richard Branson, are still concerned about automation putting humans out of work to the point where they say the government may have to pay people a cash handout, or a universal basic income, to live.
"There is a pretty good chance we end up with a universal basic income, or something like that, due to automation," billionaire tech titan Musk told CNBC. "Yeah, I am not sure what else one would do. I think that is what would happen."
As for Branson, “I think with artificial intelligence coming along, there needs to be a basic income,” he recently told The New York Times. “I think AI will result in there being less hours in the day that people are going to need to work.”
Automation Anywhere's funding round was led by the venture capital firm New Enterprise Associates and Goldman Sachs Growth Equity, an investment arm of Goldman Sachs. Investment companies General Atlantic and World Innovation Lab also invested as part of the fundraising, according to a statement from the company.
Automation Anywhere will use the $250 million to, in part, grow its robotic process automation (RPA) business, which involves using software robots to automate business processes that have previously been done by human workers, the company says. Clyde Hosein, chief financial officer of Automation Anywhere, called RPA a “multi-billion dollar” market in a written statement. The money will also enable the tech company to grow in North America, Latin America, India, Europe, Australia, Japan, South Korea and Singapore, and expand into new regions.
Disclosure: Comcast is the owner of NBCUniversal, parent company of CNBC and CNBC.com.
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