As DocuSign is reportedly exploring a sale to private equity, the company is acquiring a business itself.
On Monday, DocuSign announced it was buying Lexion, a contract workflow automation startup, for $165 million. The purchase comes as DocuSign increasingly invests in the contract management space, most recently launching DocuSign IAM, a service aimed at connecting various components of the process for creating and negotiating enterprise agreements.
Lexion was developed at the Allen Institute for Artificial Intelligence (AI2), the AI-focused research arm of the nonprofit Allen Institute. Oberoi co-founded the company with Emad Elwany, former research software development manager at Microsoft, and veteran engineer James Baird. Oberoi previously co-founded the survey platform Precision Polling, which SurveyMonkey acquired shortly after its launch.
Lexion began as a “smart” repository for contracts, allowing legal teams to ask questions about documents in natural language. But it has slowly expanded to include tools to address various use cases and document creation challenges for teams not just in legal departments, but also in sales, IT, HR, and finance.
Prior to the acquisition, Lexion had raised $35.2 million in venture capital from investors including Khosla Ventures, Madrona and Point72 Ventures.
According to DocuSign CEO Allan Thygesen, Legion’s technology will enable DocuSign customers to gain a more “granular” understanding of their contract structures and data, as well as better identify insights and potential risks. DocuSign will leverage Lexion’s AI models for contract creation and negotiation, while Lexion will build integrations with DocuSign’s products and solutions.
The purchase comes at a crucial time for DocuSign, which is valued at around $12.5 billion and is reportedly in the process of selling itself to a private equity firm. Perhaps to make its books more attractive to prospective buyers, DocuSign announced plans in February to lay off about 6% of its workforce – about 400 positions.
Reuters reported in January that Bain and Hellman & Friedman were among the final bidders in an auction for DocuSign, which could be one of the largest leveraged buyouts in 2024.
DocuSign’s other acquisitions include SpringCM (in July 2018 for $220 million), a cloud sales contract management platform, and Seal Software (in February 2020 for $188 million), a specializes in AI-driven contract analysis.