E-signature giant, DocuSign, confidentially filed to go public in March 2018, in a move set to generate attention for the wider e-signature market.
Founded in 2003, the company has raised $500 million in funding over the years, and was last valued at $3 billion in 2015.
DocuSign aims to make long-distance paperwork a struggle of the past by facilitating the electronic signing of papers, allowing for the authentication and exchange of electronic documents for both businesses and individuals.
The company initially targeted real estate, but has now been adopted across industries including banking, pharmaceuticals and telecommunications. It has also partnered with Stripe as part of a movement into the payments sector.
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DocuSign Payments allows businesses to collect payments and signatures at the same time. The technology facilitates payments made with any major credit card, Apple Pay, Android Pay and Paypal. Some of the possible applications of the service include car rentals, apartment lease agreements or insurance policies.
Due to the boom in global business and ecommerce transactions, the e-signature market is gaining ground. Growing security concerns among businesses means many are seeking to entrust the management of digital transactions to secure technology.
DocuSign's imminent IPO could bring added attention to the sector, with some competitors already looking to capitalise on this.
In a statement to MarketWatch, CEO of competitor, Vasco Data Security International, Scott Clements said: "DocuSign's impending IPO is bringing well-deserved attention to the e-signature industry, estimated at $25 billion, and its leaders, including eSignLive by Vasco."
DocuSign's IPO could also encourage other private competitors in the e-signature market, like Secured Signing, to make the next move.
In 2015, on-premise digital signatures led the way, accounting for a 60 percent share of market revenue.
Now, cloud-based solutions that enable the remote addition of signatures to documents are increasingly popular and driving the e-signature market forward. These models are expected to dominate the market by 2022.
E-signature capabilities are increasingly offered through software-as-a-service (SaaS) models. DocuSign offers free technology to individual consumers through its app, while business customers can sign up to a subscription model. A Business Pro plan (costing £33 per month) will buy a company all document signing and remote payments capabilities.
According to Business Insider, the worldwide e-signature market is expected to grow at a compound annual growth rate (CAGR) of 34.7 percent between 2017 and 2023, when it is forecast to top $9 billion.
E-signatures is currently a growth market, but could face challenges in future from biometric authentication methods, such as voice or fingerprint recognition.
Some e-signature companies such as Icon UK already account for this by incorporating biometric information into each written signature, such as rhythm and pressure.
Cultural acceptance of these methods is growing. An IBM-commissioned consumer study found that 87 percent of people would feel comfortable using biometric authentication in the near future.
DocuSign claims to have over 200 million users worldwide and increased its revenue by 39 percent to $485 million in the most recent fiscal year.
This reflects the company's arrival at the threshold commonly considered appropriate for a public offering. "We are just getting to a place of being operating cash flow break even," said DocuSign CEO Dan Springer in a 2017 interview with MarketWatch, where he also discussed filing for an IPO in early 2018.
However, the company also reported losses of $52 million in the most recent fiscal year, although this was a reduction from $115 million in losses the year prior. The company warned investors, saying DocuSign had "a history of operating losses and may not achieve or sustain profitability in the future." However, it is customary for tech companies to make similar statements in the lead-up to an IPO.
Some of DocuSign's competitors include Adobe Sign and Secured Signing but DocuSign reportedly held 40 percent of the e-signature market in 2016. In 2017, it was number four on Forbes Cloud 100 list - a ranking of the best private cloud companies in the world. It has integrated with Apple, Google, Windows and SalesForce, in addition to a range of mobile apps.
The free DocuSign app became available for Apple iOS, Google Android and Windows Phone in 2011, and currently holds a rating of 4.9 from over 18,000 reviews on the App Store.
DocuSign is currently funded by venture capital from investors such as Bain Capital and ClearBridge Investments as well as companies it provides technology to, including Salesforce, Apple and Dell.
Prior to the decision to go public, the company had operated privately for 15 years. Far from being abnormal in this respect, playing the waiting game is becoming a more common strategy for tech companies.
In 2017, just 27 tech companies filed for an IPO, compared to 50 in 2013. With 171 private, venture-funded 'unicorns' valued at over $1 billion, why is this?
One reason could be the underwhelming IPOs of high profile companies such as Snapchat and Blue Apron in 2017, who both finished the year with valuations below that of their IPO. Another is the greater availability of substantial late-stage funding from bodies such as Softbank's $100 billion fund. However, things are picking up again in 2018, with Dropbox's successful debut on the stock market boding well for DocuSign.
Other tech stars to successfully go public in 2018 so far are Spotify and Zuora, the enterprise software company. In 2018, the value of tech IPOs has already topped $7 billion, more than all of 2015 and 2016. And while consumer tech behemoths such as Uber, Airbnb and Pinterest have been more reluctant to discuss IPOs in recent years, they may well be next. Uber's chief executive, Dara Khosrowshahi, has said the company - now valued at $68 billion - is planning to go public in 2019, and Lyft and Airbnb have also signalled that preparations for IPOs are getting underway.