Posted on Wednesday, Jan 31st 2018
According to a Market Insider report, the global e-signature market is expected to grow 35% annually to $9.07 billion by the year 2023 driven by the increased adoption of security procedures coupled with government and organizational focus towards paperless offices. Billion Dollar Unicorn player DocuSign is a leading player in the segment, that many expect, is ready to list soon.
DocuSign was founded in 2003 by Tom Gosner, who is also known as the “father of electronic signatures”. DocuSign was founded to build a platform that could help companies automate processes that needed physical signatures by digitizing the end-to-end process. Its services have seen significant adoption rate. Today, its platform is available in 43 languages and is used by more than 200 million users and over 300,000 companies across 188 countries.
DocuSign charges a subscription fee ranging from $10 per month for individuals to $40 per user per month for businesses. DocuSign does not disclose its financials. Analysts estimate that its revenue was close to a $200 million run rate in 2017. Its profitability figures are not known, but last year, it had mentioned that it was at operating cash flow breakeven, and on the path to profitability.
It has been venture funded so far with more than $500 million in funding raised from investors including Dell Ventures, Intel Capital, Bain Capital Ventures, Founders Circle Capital, Sands Capital Ventures, Wellington Management, Wasatch Advisors, Iconiq Capital, Recruit Strategic Partners, BBVA Ventures, Salesforce, Telstra, Visa, MKI, EquityZen, SharesPost Investment Management, Cross Creek Advisors, Sigma West, Comcast Ventures, Kleiner Perkins Caufield & Byers, Accel Partners, Sapphire Ventures, Google Ventures, Frazier Technology Ventures, and Scale Venture Partners. Its last round of funding was held in May 2015 when it raised $233 million at a $3 billion valuation. The company is expected to go public early this year.
DocuSign was initially set up to focus on the SMB segment, especially the real estate one. Over the years though, it has expanded its offerings to the enterprise segment as well. Additionally, besides electronic document signing capabilities, the company has also expanded its service offering. Last year, it launched a payments platform that embeds the payment processing capabilities into its platform. The feature helps its customers process payments while processing agreements and invoices.
Last month, DocuSign also announced plans to acquire the IP rights and hire employees from Seattle-based machine learning and data platform startup Appuri. Prior to the acquisition, DocuSign and Appuri were working together on a pilot project to integrate Appuri’s machine learning and AI technology into the DocuSign platform. Appuri’s product is a customer engagement platform that helps automate engagement. It is powered by audience segmentation technology to deliver targeted marketing messages and product recommendations.
With the integrated service, DocuSign will be able to enhance advanced analytics within its products and business processes. Terms of the deal were not disclosed. The acquisition will help DocuSign add features like building capabilities of offering discounts from Home Depot or other stores when someone purchases a home.
Questions to DocuSign’s Board
DocuSign is in a lucrative market spot. The company also has a significant market share. A 2016 report by Forrester pegged DocuSign’s market share at 40%. Clearly, it has benefited from the first mover advantage in the space. But it has a few things to worry about. The e-signature industry is prone to acquisitions. According to Forrester, since Q2 2013, over 50% of the companies in its e-signature report had been acquired. DocuSign itself had received and shunned proposals from the likes of Microsoft, Oracle, and IBM. The Microsoft offer was estimated at $4 billion. Besides acquisition prospects, competition is heating up as well from the likes of Adobe which continues to, relentlessly, build its document management related SaaS offerings.
What is DocuSign doing to remain independent? It brings me back to the question I asked in my post SaaS Companies: You Have an Unprecedented Opportunity. If DocuSign can continue to remain independent, it needs to identify the next $50M, $100M, $200M blocks of opportunities that are adjacent to their current product line and lying latent. For DocuSign, what are these?
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns.
This segment is a part in the series : Billion Dollar Unicorns
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