How Does DocuSign Make Money?

San Francisco-based DocuSign (DOCU) enables individuals to affix their digital signatures on documents using its secure electronic signature technology and digital transaction management services. It facilitates the exchange of contracts and authorized documents electronically and securely. It also offers electronic authentication of entities, individuals, and documents, as well as the management of user identity and workflow automation.

DocuSign completed its initial public offering (IPO) on April 27, 2018. Shares were priced at $29, helping the company raise $629 million on a valuation of $4.4 billion before they started trading on the Nasdaq. The company was valued on private markets at about $3 billion prior to its public offering.

But just how does the company measure its success? Let’s look at DocuSign's various offerings, and how it uses them to make money.

Key Takeaways

  • DocuSign offers digital solutions for document preparation and management using its secure electronic signature technology and digital transaction management services.
  • The company went public in April 2018, pricing shares at $29 each and raising $4.4 billion.
  • DocuSign serves many industries, including real estate, financials, and healthcare.
  • Services range from eSignature, Document Generation, and DocuSign Contract Lifecycle Management to name a few.
  • DocuSign earns money through monthly and annual subscriptions paid by its customers.

DocuSign: A Brief History

DocuSign was founded in 2003 by Court Lorenzini, Tom Gonser and Eric Ranft. Headquartered in San Francisco, the company has more than 5,000 employees, including chief executive officer (CEO) Dan Springer and chief financial officer (CFO) Cynthia Gaylor.

The company's mission is to "accelerate business and simplify life for companies and people around the world." DocuSign is an industry leader, developing e-signing technology and capabilities, allowing businesses to connect with others. As noted above, the company provides businesses of various sizes with products and services related to:

  • The collection of information, such as contracts, documents, and signatures
  • The conversion of manual documents to electronic platforms
  • The ability to access and sign documents online via desktops, laptops, and other electronic devices

Which Industries Does DocuSign Serve?

According to its website, DocuSign has more than one billion users in more than 180 different countries. More than one million of these are paying customers. This includes over 3,000 local, state, and federal government agencies.

Its services are also used by companies in a variety of industries, including real estate, financials, and healthcare to name a few. For instance:

  • Agreements form an integral part of the real estate sector for buying, selling, refinancing, or rental deals. DocuSign offerings help property developers, sellers, agents, and brokers complete their documentation done in minimal time.
  • The documentation needs of the financial industry, which includes banks, lenders, wealth managers, asset managers, insurance intermediaries, and brokers, are also fulfilled by DocuSign solutions.
  • Within the healthcare space, DocuSign solutions help by procuring necessary details quickly and easily. The services can be used for patient consent, new patient forms, medical records update, claims processing data, and provider agreement.

Each department of a particular business (facilities, finance, human resources, IT, support operations, legal, sales/marketing, procurement, and product/process management) that has any documentation, signing, and approval needs can also be a potential client for DocuSign.

The company competes with Adobe EchoSign, Nitro Cloud, HelloSign, and Authentisign—all of which offer similar services.

DocuSign Products and Services

Before we delve into how the company makes money, here's a look at DocuSign's main products and services.

Electronic Signature

DocuSign's secure eSignature technology allows individuals to sign and consent to a variety of documents, including:

  • Legal documents, such as contracts and nondisclosure agreements (NDAs)
  • Tax-related forms
  • Payment and purchase orders
  • Letters, including those related to employment offers
  • Vendor, master service, and other types of agreements

The entity that draws up the document sends an electronic copy to the individual(s) to sign via email or a secure link. The recipient(s) reviews the document and, if they agree, click on the signature panel to accept. The section fills with an electronic version of their signature or printed name/initials along with the date. The signed copy is sent back to the sender.

As with the majority of DocuSign's products, its eSignature technology allows individuals to review and sign documents anywhere and at any time while eliminating the need for paper forms. It also lowers the costs associated with drawing up paperwork, since everything is done electronically.

Document Generation

DocuSign Generation or DocuSign Gen allows companies to produce the important agreements they need to send to clients and partners. These documents can then be sent electronically and signed by the recipients using the eSignature service. This service automatically determines the required size of the document using business rules, which add or remove content based on specific data.

DocuSign Contract Lifecycle Management

This product provides users with applications that help manage various stages in the lifespan of a contract. This includes the initiation and management, as well as anything relating to contract termination or renewal. Using this suite of apps allows users to eliminate unnecessary delays, cut down costs, save time, and make the process run more smoothly and quickly than using traditional methods.

Other Products and Services

DocuSign also offers other services to its clients, including:

  • Contract Negotiation
  • Contract Analytics
  • Payment
  • Guided Forms
  • Clickwraps
  • Electronic Notarization

DocuSign Agreement Cloud

Companies can sign up for DocuSign's complete package, which includes more than a dozen applications (those noted above) for the preparation and management of electronic agreements. Users can access the cloud through any platform, such as Google Suite, Salesforce, or Workday. This suite can complement workflows through users' existing applications and processes.

DocuSign's electronic signature services eliminates the need to send paper documents. 

DocuSign Revenue

Users can choose to pay for individual DocuSign services as they see fit or they can choose from a host of monthly or annual plans to cater to their needs and businesses:

  • The Personal Plan: This plan allows a single user to send up to five documents each month to collect signatures and is suitable for individual contractors and small-scale employers. It offers basic features, like a specified number of fields to collect basic information, reusable templates, basic workflows that automatically move the documents from one party to the other based on submission status, support for multiple languages, and integration with various online storage solutions like Google Drive and DropBox. The plan starts at $10 per month or $120 annually.
  • The Standard Plan: This plan offers additional functionality to set and send automated reminders, and personal branding across a range of documents. Standard plans start at $25 each month or $300 annually per user.
  • The Business Pro Plan: This plan offers additional features which are intended for large organizations. They include two-factor text message authentication, in-person signatures on client devices, bulk sending of forms and documents, and even the collection of any necessary payments like those for submitting a form fee or paying for an invoice. Monthly charges for this plan begin at $40 per month. Annual charges start at $480 per user.

DocuSign also offers bespoke custom solutions. In addition to all the features available in the Business Pro plan, one can benefit from other functions that allow integration with various CRM solutions and with existing or new application programming interfaces, admin-level access for user management, and enterprise-level support.

There are also special plans customized for real estate professionals ranging from the:

  • Real Estate Starter at $10 per month or $120 annually
  • DocuSign for REALTORS at $20 per month or $240 annually
  • Real Estate for $25 per month or $300 annually

Keep in mind that DocuSign does not charge individuals who sign the documents, but it makes money from entities that initiate contracts. For instance, if a contract needs to be signed between an Africa-based content writer hired by a U.S.-based web portal, only the employer pays DocuSign for creating, hosting, notifying, and managing such contracts and signatures. The writer, on the other hand, isn't charged for signing the electronic contract.

Financials

DocuSign's fiscal year ends on January 31 of every year. It reported 2021 fiscal year results on March 11, 2021. The company benefitted from what it calls the growing "work from anywhere" economy. This was partly due to the COVID-19 pandemic, which forced many companies to rethink how they operate and changed a large portion of the workforce to a work-from-home platform.

The company earned $1.5 billion in revenue for fiscal 2021, which was an increase of 49% from the previous year. Annual subscription revenue came in at $1.4 billion (a jump of 50% from 2020) while professional services and other revenue amounted to $71.7 million—a year-over-year (YOY) increase of 29%.

What Is the Purpose of DocuSign?

DocuSign is a company that provides corporations and individuals with electronic services in document management. It allows people to put their digital signatures on documents, such as contracts and agreements, using its secure technology. Entities that use DocuSign's services can authenticate entities, individuals, documents, and workflow, along with user identity management electronically.

What Company Owns DocuSign?

DocuSign is a publicly-traded company whose shares trade on the Nasdaq.

What Is DocuSign’s Funding History?

DocuSign raised about $536.2 million through 20 different rounds of funding. The company's most recent round of financing took place on June 13, 2017, in the secondary market. The company has more than 50 funders, including Manhattan Venture Partners and ESO Fund. 

The Bottom Line

The large gamut of products, services, and solutions offered by DocuSign caters to a wide variety of industry sectors as well as individuals and fits into fulfilling the needs of various departments of a business for any documentation needs that can be digitized.

Article Sources
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