Shares of UiPath rose nearly 17% in their market debut, after the robotic-software company’s initial public offering raised about $1.3 billion.

The stock opened at $65.50, compared with the $56-a-share pricing of its IPO. Early afternoon, the stock traded at $68.38, giving the company a valuation of about $35.5 billion.

In February, a $750 million funding valued the company at $35 billion.

UiPath, founded in Romania in 2005 and now based in New York City, is one of several companies that bets on RPA, short for robotic process automation, and other automation solutions as a ticket to efficiency.

The idea is that a digital army of “bots” handle repetitive, time-consuming tasks at a fraction of the time and cost, allowing companies to connect different systems and freeing employees—and resources—to do more meaningful, strategic work.

Companies have increasingly digitized operations, but in silos, said lead director Rich Wong, a partner at Silicon Valley venture-capital firm Accel, an early investor in UiPath. The real efficiency, he said, comes from companies being able to connect those digital islands.

UiPath estimated the current market opportunity at more than $60 billion. “And we are at the very first or second inning of this process,” Mr. Wong said.

UiPath Chief Executive Daniel Dines, who is also one of the company’s founders, said “Covid has only accelerated the digital transformation, and automation is the cornerstone of digital transformation services.”

The company reported revenue of $607.6 million for the year ended in January, up 81% from the previous year. It also became free-cash flow positive in the most recent year.

UiPath said its customers run the gamut, from Bank of America Corp. to CVS Health Corp. , Toyota Motor Corp. , Ericsson AB and CrowdStrike Holdings Inc. As of Jan. 31, UiPath had 89 customers which bring the company at least $1 million in revenue annually, collectively accounting for about 35% of its total revenue, up from 43 such customers representing 25% of revenue in the prior year.

UiPath’s competitors include Blue Prism Group PLC and Automation Anywhere Inc. along with new entrants like Microsoft Corp.

Starting the company outside of the U.S. had two advantages, Mr. Dines said. It forced the company to think globally, while also giving it room to make mistakes in its early years.

Today, he said, the U.S. is UiPath’s fastest-growing market though a global focus remains core to the company.

Mr. Dines, who is also board chairman, stands to retain voting control of the company through his ownership of Class B shares, which have 35 votes apiece. The Class A stock sold in the offering carries one vote a share.

Accel’s Mr. Wong said the concentration of power is a bet on Mr. Dines and the work he has done.

“It’s fundamentally a belief in letting, for positive reasons, Daniel have the authority to stay in control of the company,” Mr. Wong said.

“Having the founder still be the CEO, and the CEO being in full control of [the] company, we believe leads to the best results,” he said.

UiPath, which sold about 9.4 million shares in the offering, said it would donate up to $500,000 for charitable purposes. Separately, it has pledged to donate about 2.8 million shares over the next decade for charitable purposes.

Write to Maria Armental at [email protected]

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This post first appeared on wsj.com

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