According to a Reports Monitor report published last year, the global digital signature market is estimated to grow by more than 31% annually over the next six years. Billion Dollar Unicorn DocuSign (Nasdaq: DOCU) is a leading player in the segment that is counting on growth driven by the increasing penetration of internet and the growing acceptance of e-signatures in the Banking, Financial Services, and Insurance sector.

DocuSign’s Financials

For its third quarter, DocuSign revenues grew 37% to $178.4 million with Subscription revenues growing 38% to $169.4 million and Professional services revenues growing 17% to $9 million. Billings for the quarter grew 40% to $198 million. DocuSign ended the quarter with a loss of $52.8 million. On an adjusted basis, the company reported a break-even quarter. The market was looking for revenues of $174 million and a loss of $0.02 per share.

DocuSign expects to end the current quarter with revenues of $192-$194 million and the year with revenues of $693-$695 million. The market is looking for revenues of $193.1 million for the quarter and $694.4 million for the year.

DocuSign’s Growth

DocuSign is making sure it delivers strong growth through acquisitions. Last year, it had announced the $220 million acquisition of Chicago-based cloud document generation and contract management player SpringCM. Now that the acquisition is complete, DocuSign is leveraging SpringCM’s capabilities to deliver newer products to its customers. The first product being released as part of this collaboration is DocuSign Gen. DocuSign Gen will allow Salesforce users to automate, simplify, and streamline the generation of agreements including sales contracts, quotes, and Non-Disclosure Agreements. The product is expected to be available in spring this year and will be targeted at the SMB segment. For larger enterprises, DocuSign already offers SpringCM’s Contract Management solution, which includes the agreement generation capabilities.

By integrating DocuSign Gen with the Salesforce Lightning Experience, DocuSign will offer the ability to automatically pull opportunity details and Salesforce CPQ (configure, price, quote) data to pre-populate agreements. The process will reduce manual work, restrict human error, and accelerate the agreement process. DocuSign already exists in the Salesforce world through the Salesforce AppExchange, but the new solution will simplify and accelerate the process before the signatures are needed.

Competition in the industry is heating up. Earlier this week, Dropbox announced plans to acquire San Francisco-based HelloSign for $230 million. HelloSign had raised $16 million in funding. Prior to the acquisition, Dropbox was focused on the file storing and sharing market. But HelloSign’s acquisition will put it in direct competition with the likes of DocuSign and Adobe’s EchoSign. It will help Dropbox make significant inroads into a market that it hadn’t stepped into so far. Dropbox’s announcement asserts the fact that companies need to consider smaller startups looking to exit.

What companies do you think need to be on DocuSign’s radar to help expand its market reach?

Its stock is trading at $48.30 with a market capitalization of $8 billion. It had touched a 52-week high of $68.35 in August last year. It has climbed back from the 52-week low of $35.06 that it had fallen to in December last year. The stock had listed at $29 in April last year when it raised $629 million at a valuation of $4.4 billion.

Prior to the listing DocuSign had raised $500 million from investors including Dell Ventures, Intel Capital, Bain Capital Ventures, Founders Circle Capital, Sands Capital Ventures, Wellington Management, Wasatch Advisors, Iconiq Capital, Recruit Strategic Partners, BBVA Ventures, Salesforce, Telstra, Visa, MKI, EquityZen, SharesPost Investment Management, Cross Creek Advisors, Sigma West, Comcast Ventures, Kleiner Perkins Caufield & Byers, Accel Partners, Sapphire Ventures, Google Ventures, Frazier Technology Ventures, and Scale Venture Partners. Its last round of funding was held in May 2015 when it raised $233 million at a $3 billion valuation.

The e-signature market is huge, with a lot of headroom for all the players to continue to grow. In addition, I like the fact that DocuSign is acquiring smaller startups to broaden its product portfolio. This is a very promising company.