September 24, 2007

DocuSign Raises $12.4 Million

Nick Gonzalez

12 comments »

DocuSign, an eSignature service, has raised a $12.4 million series C led by new investor WestRiver Capital, LLC and their existing investors Ignition Partners, Frazier Technology Ventures and Sigma Partners. It follows a Series B investment of $10 million in April 2006 from Frazier, Ignition, and Sigma. DocuSign, which has been around since 2003, enables companies to get legally binding signatures quickly over the internet instead of over the fax or mail. The whole digital signature business was really opened up during the turn of the century with that passing of the UETA and ESIGN acts, which clarified the legal grounds for electronic signatures nationwide.

DocuSign certifies digital signatures completely over the web, acting as a intermediary who holds the documents and verifies the identity of the signature. To get a document digitally signed, you upload the documents to DocuSign (works with any document you can print), select the parts needing a signature, and create an authentication code for the transaction. DocuSign then sends an email to the recipient with a link to the documents where the signer can log in to their DocuSign account, enter the authentication code, and simply click the signature points to sign the documents. The person’s eSignature (example right) and ID number are then posted in those points of the document, and the signed documents sent back to the sender. There are more details breaking down the transaction on their product page.

Competitors include EchoSign, VeriSign, Entrust and others.

If you have doubts that people are using eSignatures, you should know that, to date, DocuSign has completed over 5 million of them. Their clients currently include Expedia, Land America, RE/MAX, AMICA, Worldspan, Sony, Weyerhaeuser, Yamaha, Tektronix, and Fidelity National Title.

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Steve Ballmer

September 24th, 2007 at 9:37 pm

Signatures!
Sooooo last generation!
cute though, rectal probe scanns are the latest greatest thing.
Some guys like it better than others, but that’s what we are installing in the Redmond offices.
http://fakesteveballmer.blogspot.com
Dave

September 24th, 2007 at 9:42 pm

I never really got the whole thing with signatures. In the course of your life you sign so many signatures that wind up in trusted and non-trusted places that to use your signature as the sole means of authentication seems flawed.
dave mcclure

September 24th, 2007 at 11:56 pm

hmmm. i know a few lo-tech lawyers and VCs who might want to look into this.

naah, forget it… they’re too busy killing trees & billing hours.
Abhishek

September 25th, 2007 at 12:38 am

I agree with Dave in saying that using signature as the only means of authentication seems flawed…but we can at least make it more secure by having some really good signature.

http://www.signinstyle.com
Fake "Fake Michael Arrington"

September 25th, 2007 at 5:49 am

I don’t think the concept is to use the signature as a mechanism for authentication. It’s to use the signature as a mechanism for AGREEMENT.

Huge difference.

Of course you need to authenticate the document signer.

I hate stating the obvious to a geek crowd, but here goes:

What you are trying to do with a digital signature is to associate agreement with terms. In other words, create an unchangeable document that the person who signs it agrees to. And this requires both authentication and non-changeability. The problems with documents, copy machines and faxes today are that it’s difficult for you to prove to a court that THIS is the exact set of terms that were agreed to (particularly when a “signature” can be cut-and-pasted (using Photoshop or scissors) and faxed.)

Digital signatures calculate a numeric hash of the document, so that changes cannot be made later. This service can prove that the document was unchanged, after it was agreed to.

The “picture” of the signature is just an icon to relate it to the physical paradigm.
Alex

September 25th, 2007 at 10:23 am

Nick,

Great post. Impressive response time - the news just broke a few hours ago.

There is another eSignature provider worth mentioning; this one doesn’t depend on venture capital.

eLynx (www.elynx.com) offers uSign under the SaaS model. The product is used by mortgage lenders and insurers to make our lives less dependent on paper.

Best.
phenom

September 25th, 2007 at 12:05 pm

Great news…what abt other eSignature providers.
David Wall

September 26th, 2007 at 9:01 am

Our congratulations to DocuSign for getting more cash from investors to help them grow and perhaps generate revenues that eventually may sustain the company.

Please note that Yozons, with its Signed & Secured and eSignForms products, is a competitor who has been in business since 2000 and has a fast growing business with significant customers (Enterprise, Citrix, Pitney Bowes, several universities and Comcast among a long list of smaller businesses), many of whom selected Yozons over DocuSign.

You also failed to mention that alamode’s SureDocs is a direct competitor in the print-to-sign electronic signature space and has a fixed annual price that is dramatically less than what DocuSign offers. Some like to use EchoSign’s solution, especially when dealing with hybrid esign-fax documents.

If you don’t see the digital signature in the PDF, it’s because it’s not been digitally signed. Digital signatures are an encryption technology, while electronic signatures are a legal concept based on process, one step of which is the ability to create a reliable electronic record. Many uses digital signatures, including Yozons, for this purpose, but it’s not clear that such technology is being used by DocuSign.
Travis Reeder

October 1st, 2007 at 2:20 pm

Disclaimer: I am a co-founder of Middlepost.

Congrats to Docusign on their funding. We have had a good response since we launched our electronic signature service at Middlepost one month ago. It’s great to see the esignature industry being adopted and growing.
Ben

October 7th, 2007 at 1:54 pm

Eh middlepost…raising more money just means there’s no revenue to keep the biz afloat. They already raised over $15M and still cannot show revenue to float them, so they needed another $12M just to keep their operations going. It’s risky money taking over the early birds that are probably diluted out now or just preferred stock that makes their worthless.