HFS Highlight: Automation investment boom sees ProcessMaker take $45m in first outside investment

Low-code and open-source workflow automation vendor ProcessMaker has taken its first outside investment since its launch in 2008 – raising $45m in Series A funding.

Based in Durham, North Carolina, ProcessMaker has been bootstrapped until now, on a journey that started with co-founders Bobby Vernon and Brian Reale and has now reached 140 employees across the globe with offices in Bolivia, Columbia, the UK, and France. They have an international footprint with customers in 52 countries – with a skew to some less traveled by the automation sector – and a focus on mid-market banking, manufacturing, and higher education.

The investment comes from Aldrich Capital – a company that typically only invests in businesses with annual revenue above $10m.

Workflow is essential to the OneOffice Emerging Tech Platform

HFS identifies ‘Workflow’ as an essential element in the OneOffice Emerging Tech Platform (Exhibit 1) – playing a critical role in the enablement of the OneOffice organization. This is the HFS Research view of what a digital transformation looks like when it is put into action; where the processes run end-to-end across the organizational value chain, the needs of customers are supported in a digital duality with employees and in which employee experience is a significant component of the overall customer experience.

Exhibit 1: The OneOffice Emerging Tech Platform – Workflow is essential

Source: HFS Research 2021. Examples are representative

ProcessMaker offers a range of off-the-shelf industry solutions

Among ProcessMaker’s offerings is an off-the-shelf process for mid-sized banks which enables them to deploy a commercial account opening process in a matter of weeks, with a quality of experience targeting those provided by bigger banks at a higher cost.

They have also specialized in automating student-facing processes in higher education – taking the drudgery out of the transfer of credit approvals and grade changes. The team claims it has been able to cut the average time for approving credits from 5 months to 19 hours in a case study featuring one of the largest public university systems in the US.

Every second counts when handling the emotional stress of the pandemic

“We make a huge impact on student lives,” explained CEO and co-founder Brian Reale. “For students who were already struggling with the financial and emotional stress of the pandemic, waiting 5 months to know when or if transfer credits would be approved, often meant the difference between dropping out of college or staying to graduate.”

“At ProcessMaker our mission is to make every second count,” he added. “This resonates in everything we do.  At the most obvious level, it means empowering organizations to make their business processes more efficient.  On a deeper level, it means giving customers a way to quickly build and deploy beautiful, engaging digital business processes that users love.”

Investment in automation is accelerating across the board

ProcessMaker is benefiting from the global boom in investment in automation technologies we have witnessed during the pandemic (Exhibit 2).

Exhibit 2: Global 2000 enterprises have ramped up their spending on automation technologies

Source: HFS Research March 2021 (Supported by Blue Prism). Surveying 400 of the Global 2000 enterprises

That investment boom has seen valuations sky-rocket UiPath’s recent Initial Public Offering (IPO) is an extreme example – valuing it at around $30b with market capitalization subsequently rising to close to $40b within a week.

ProcessMaker offers out-of-the-box connectors for both Automation Anywhere and UiPath and has its own document scanning and extraction OCR/ICR bots. It has a built-in document management system but also integrates with repositories such as Sharepoint, Box, Dropbox, and Google Drive.

The business has built out a wide partner network which includes Wipro and a range of regionally based partners such as Aequam in Poland, Bitia in Italy, and ITfluence in Spain, six partners in Africa (3 in Nigeria, two in South Africa, and one in Kenya). The global partner reach extends to a further 12 in South America, Selensoft in Turkey, nine partners in North America, and a further five in Asia.

That geo-focus is unusual and, likely, less competitive, allowing ProcessMaker to punch above their weight in their chosen markets.

New partnerships and compliance award set the scene for growth

Among its key reference customers are French automotive supplier Valeo, telco Telefonica, The Co-operative Bank of Kenya and the United Bank of Africa, Lenovo, The Adecco Group, and the Peruvian Ministry of Housing.

With the new investment in place, ProcessMaker is moving fast with a new partnership with consultants Auty in Costa Rica, and the achievement of the data security compliance certificate Service Organization Control (SOC) Type 2, in the past month.

Aldrich Capital’s expectation, that low-code process automation will transform hundreds of verticals over the coming decade, hints at the likely focus of investment for ProcessMaker – that it will extend its range of off-the-shelf solutions into adjacent verticals.

The Bottom Line: The time is right to grow the partner base and plan measured expansion

Founders Bobby Vernon and Brian Reale’s focus on mid-market banks, higher education, and regions that are not on everyone’s expansion roadmap, has given them a great foundation on which to make the most of their investment. We’re surprised they only list Wipro of the big service providers among their partners to date. Rivals are well ahead of them in their relationships with global players and we expect that a focus on those partnerships would pay dividends.