While it purports to be selling to private equity, DocuSign is buying a business.
A PR representative for the firm informs me that DocuSign (which now goes by Docusign, with a lowercase “S”) announced on Monday that it would be purchasing contract workflow automation startup Lexion for $165 million. The acquisition occurs as DocuSign increases its investments in the contract management market. Recently, the company launched DocuSign IAM, a service that connects various aspects of the corporate agreement creation and negotiation process.
The nonprofit Allen Institute’s artificial intelligence (AI2) research division developed Lexion. Gaurav Oberoi, who co-founded survey platform Precision Polling, which SurveyMonkey purchased soon after it started, co-founded the firm with former Microsoft research software development engineering head Emad Elwany and engineering veteran James Baird.
Originally intended to be a “smart” contract repository, Lexion allowed legal teams to query documents in natural language. But gradually, it grew to include tools to handle other use cases and difficulties in document preparation for teams in sales, IT, HR, and finance, in addition to legal departments.
Before the purchase, Lexion obtained $35.2 million in venture funding from Khosla Ventures, Madrona, and Point72 Ventures.
Lexion’s technology, claims DocuSign CEO Allan Thygesen, will help DocuSign clients better comprehend their contract structures and data at a “more granular” level and spot insights and possible hazards. Lexion will provide integrations with DocuSign’s products and services, while DocuSign will use Lexion’s AI models for contract development and discussions.
This acquisition by DocuSign, which is reportedly in the process of selling itself to a private equity group, comes at a crucial moment. The company has a valuation of $12.5 billion. Perhaps trying to increase the appeal of its books to potential buyers, DocuSign announced in February that it would be firing around 400 employees, or about 6% of its total staff.
One of the largest leveraged buyouts in 2024 may include Bain and Hellman & Friedman, according to a January Reuters story.
Additional acquisitions by DocuSign include the cloud-based sales contract management platform SpringCM (purchased in July 2018 for $220 million) and the AI-driven contract analytics startup Seal Software (purchased in February 2020 for $188 million).
