As DocuSign According to reports explores a sale to private equity, acquires a company itself.
On Monday, DocuSign (which he now prefers to pass Document, with a lowercase “S,” a PR representative from the company tells me) announced it is buying Lexion, a contract workflow automation startup, for $165 million. The purchase comes as DocuSign makes increasing investments in the contract management space, with its latest release DocuSign IAMa service aimed at connecting different elements of the corporate agreement creation and negotiation process.
Lexion was incubated at the Allen Institute for Artificial Intelligence (AI2), the AI-focused research arm of the nonprofit Allen Institute. Gaurav Oberoi co-founded the company with former Microsoft chief research software engineer Emad Elwany and engineering veteran James Baird. Oberoi previously co-founded survey platform Precision Polling, which was acquired by SurveyMonkey shortly after its launch.
Lexion began as a “smart” contract repository, allowing legal teams to ask natural language questions about documents. However, it slowly expanded with tools to address various use cases and document creation challenges for teams not only in legal departments, but in sales, IT, HR, and finance.
Lexion had raised $35.2 million in venture capital before the acquisition from investors including Khosla Ventures, Madrona and Point72 Ventures.
According to DocuSign CEO Allan Thygesen, Lexion’s technology will enable DocuSign customers to gain a “more granular” understanding of their contract structures and data, as well as better identify information and potential risks. DocuSign will use Lexion’s AI models for contract creation and negotiations, and Lexion will create integrations with DocuSign’s products and solutions.
The purchase comes at a pivotal time for DocuSign, valued at about $12.5 billion, which is said to be in the process of being sold to a private equity firm. Perhaps in an effort to make its books more attractive to suitors, DocuSign announced in February plans to lay off ~6% of its workforce — about 400 jobs.
Reuters reported in January that Bain and Hellman & Friedman are among the final bidders in an auction for DocuSign, which could be one of the biggest leveraged buyouts of 2024.
DocuSign’s other acquisitions include SpringCM (July 2018 for $220 million), a cloud platform for managing sales contracts, and Seal Software (February 2020 for $188 million), a company specializing in AI-based contract analytics intelligence.
