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 startups 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 from the fact that they have hitched their wagon to a legacy star,” Brodsky claims. “With or without 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 know 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.)
Hyperscience closed its round in March after a first quarter of 2020 in which the company says it grew revenue by 300%; the day after the term sheet was signed, the market dropped 2,000 points. “You’re sitting there as an investor asking yourself, hmm, okay, how do I feel about the deal I struck,” Robinson says. But Hyperscience has never lost a customer, the investor claims, and Brodsky says his startup has seen a boost in demand since Covid-19 pushed businesses to work remotely. “We’re seeing large global enterprise digital transformation happen at a pace over the last two months that I don’t think I’ve seen before in my career,” says Robinson.
Announcing its funding as protests in support of the Black Lives Matter movement and against police violence grip the nation, Hyperscience has also had to reckon with its software’s role in society. Brodsky insists, like his RPA unicorn peers, that his technology can empower workers by freeing them up to more complex, higher-paid jobs, while raising the baseline of quality of care for health patients and the response times for insurance or benefits applicants – all while making it easier to hire talent anywhere.
It’s an argument that raises a larger philosophical question about software: are all jobs created equal? Is a local job lost more valuable than one (or two) created far away? What happens when customers don’t act in good faith, but use tech like Hyperscience’s to maximize profits by eliminating roles without replacing them anywhere else? “None of us are politicians or [social] experts, we’re a software company,” Brodsky tells Forbes in a follow-up interview. “But one of our core values is equality for all… and it’s one of the reasons we’re building what we’re building.”
