To e-signature and beyond

It took over a decade for enterprises to get comfortable ditching the pen in favor of digital signatures. And while adoption was certainly rising prior to the pandemic, the demands of the last year-and-a-half accelerated that transition.

As companies increasingly rely on digital technologies for everything from e-signatures to contract negotiations, sector leader DocuSign is hoping to accelerate the next wave of innovation in the industry. Last week, the company launched its own corporate-backed venture firm aptly named DocuSign Ventures.

• The new division will focus on what corporate development head Eric Darwin labels the "agreement cloud," which encompasses the digital signature, along with services like identity verification and digital payments. The startup portfolio currently includes Pactum, Snapdocs, LegalTech Fund and BlackBoiler.
• "We think we're the only agreement cloud-focused corporate venture firm out there," Darwin told Protocol. "We want to get entrepreneurs that are thinking about building innovation and where it intersects with agreements. And we want them to be thinking: 'How can DocuSign help us?' That's what we're here for."

Venture firms backed by enterprise tech giants are, of course, nothing new. Salesforce, Microsoft, Adobe and many more all have investment arms.

• Many of those pour money into startups that specialize in areas outside of the company's core speciality in the hopes of securing a significant return. For example, Microsoft doubled its investment into C3.ai, while Salesforce tripled its investment in Zoom.
• But they can also give outsiders a window into where companies might be taking their product suites — or even signal potential future acquisitions.
• Salesforce Ventures, for example, is a major backer of construction technology startups, including Andpad, a provider of project management software for the industry.
• While Salesforce is quickly expanding the scope of sectors it serves, the company doesn't yet offer a product specifically for the construction market.

But DocuSign Ventures will have a more narrow focus, according to Darwin. The company made $20 million in investments in early-stage startups prior to last week's launch, but the announcement is meant to signal a more formal commitment to ushering in the next generation of providers that build upon DocuSign's e-signature capabilities.

• Leading the team is Darwin, who helped create Salesforce Ventures, as well as former Cisco venture investment head Donald Tucker and former Workday executive Jason Kamosi. Collectively, the group has invested $10 billion over 100 deals.
• And while DocuSign's past investments in Clause and Seal Software ultimately led to acquisitions, that's not necessarily the main focus for DocuSign Ventures.
• "It's not the primary motivator," said Darwin. "The investment is just another arrow in the quiver to identify and bring innovation into the ecosystem."

There's a strong business case for keeping the narrow focus, particularly as the corporate world moves to a workforce that is much more dispersed and split between remote and in-office workers.

• DocuSign estimates that the e-signature market alone is worth $25 billion and, by and large, still in its early stages. The broader "agreement" market is expected to be at least double that.

It's clear the future of office work means employees won't have immediate access to a printer, pen and scanner. That's going to require enterprises to more quickly adopt tools like e-signatures.

• DocuSign, as well as competitors like Adobe, are poised to dominate in that world. But many other companies, including Box and Notarize, also see an opportunity to own part of the overall "agreement" market.
• DocuSign Ventures is a big step towards helping to get in on the ground floor of tomorrow's tech advancements. The challenge becomes if the company tries to tackle too many different problems at once.
• In fact, DocuSign's share price plummeted 4% in the past month amid concerns over future growth in a post-pandemic world.

Owning the entire lifecycle of a contract or document is much harder than owning the dotted line.

• DocuSign has proven it can dominate the latter. The jury is still out on whether a venture capital arm will help it do the same for the other areas.

—Joe Williams

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