2016 IPO Prospects: DocuSign Looks Ready To Sign Up

| About: DocuSign (ESIGN)

Summary

DocuSign is a Digital Transaction Management platform that could help companies automate processes that need physical signatures.

Its last round of funding was held in May 2015 when it raised $233 million at an impressive $3 billion valuation.

Analysts and DocuSign are hopeful of the company going public soon.

According to the global Digital Transaction Management (DTM) report by Aragon Research, 70% of large companies globally are working toward implementing DTM as a business imperative by the end of 2016. The DTM market is estimated to grow to $30 billion by 2020.

DocuSign's Financials

Tom Gosner, the "father of electronic signatures," set up DocuSign (Private:ESIGN) in 2003 as a Digital Transaction Management platform that could help companies automate processes that needed physical signatures. The process of getting a physical signature slows down several business processes. By digitizing the requirement, DocuSign has helped several industries, in particular the real estate industry, speed up paperwork.

DocuSign's cloud-based platform has seen significant adoption. Today, their services are used by more than 50 million users across 188 countries in 43 languages. They have been deployed in over 100,000 companies and see an enrollment of over 50,000 new unique users every day. Their cloud signature process shows completion of over 51% documents within an hour of initiation.

DocuSign earns revenues through a subscription-based model with fees ranging from $10 per month for individuals to $125 per user per month for businesses. Being privately held, DocuSign does not disclose its financials or customer metrics to ascertain revenue potential.

It has been venture funded so far with $508.1 million in funding from 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 an impressive $3 billion valuation. That is a significant increase from the $1.6 billion valuation the company had recorded in 2014.

DocuSign's Growth

DocuSign is using the new funding toward international expansion. During the last quarter, DocuSign announced plans to enter the Japanese market. Overall, the company is focused on three key goals: grow revenues, ramp toward profits and build its global identity standard. DocuSign wants to be more than just a digital signature platform. It wants to be the "Switzerland to digital management" by handling encryption, permissions and compliance management of documents in an organization.

According to Aragon Research, by the end of 2017, 65% of the enterprises will replace paper-based processes with digital processes. The research firm credits DocuSign with being a leading force in the industry.

DocuSign has successfully adapted to the mobile world by delivering an intuitive mobile app that allows users to sign and return documents for free. DocuSign has had a first mover advantage in the space and has managed to amass a gigantic user base. But it's facing stiff competition from bigger players. In 2011, Adobe entered the space with the acquisition of echoSign to release its eSign offering. Like DocuSign, Adobe too offers its products at a monthly subscription fee ranging from $10 for individuals to $45 per seat per month for businesses.

Analysts and DocuSign are hopeful of the company going public soon.

Disclosure: None.