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Tuesday, July 17, 2012 - Page updated at 11:30 a.m. Information in this article, originally published July 13, 2012, was corrected July 16, 2012. A previous version of this story incorrectly stated that DocuSign has 130 employees. The company has 265 employees, including 130 at its Seattle headquarters.
Seattle's DocuSign snags $47.5 million in venture capital for growth
By Karl Baker
Seattle Times business reporter
DocuSign, the Seattle electronic-signature company, has raised a hefty $47.5 million from venture capitalists, the company said Friday.
DocuSign offers a cloud-based software system that allows individuals to read and sign contracts online. Chief Executive Keith Krach says the money will go for both research and development and to expand the business into new areas, specifically Europe.
Krach predicts strong growth in the digital contracts sector. Companies of all types will continue to look for savings by reducing paperwork costs, he says.
"Over the next decade, we see the vast majority of signatures becoming electronic," Krach said.
The San Fransisco-based venture-capital firm Kleiner, Perkins, Caufield, Byers was the lead financier on this deal. Mary Meeker, a partner in that firm and one of the leading analysts of Internet businesses, was appointed to the DocuSign board Friday.
"DocuSigning is an inevitable way more and more people will finish business faster," Meeker said in a statement.The deal was one of two notably large venture-capital financing rounds in the state's tech sector recently. The other came in March when $50 million flowed into the coffers of the Bellevue-based startup, Apptio.
In the first three months of 2012, there were 26 venture-capital deals in Washington state worth $167 million, according to the quarterly MoneyTree report from PricewaterhouseCoopers and the National Venture Capital Association. DocuSign's single deal is more than a quarter of that total.
December 2010 was the last time DocuSign tapped into venture capital, when it raised $27 million.
Krach says DocuSign, which has 265 employees, including 130 at its Seattle headquarters, accounts for about 70 percent of electronic signatures worldwide.
But the company, founded in 2003, still operates in the red. Krach says at this stage of development, the company is focused on growth over profits.
"We're just stepping on the gas and growing," he said. He declined to reveal DocuSign's annual sales figures.
One avenue for growth is in the hefty bundles of government contracts negotiated and signed each day. "That's a big target for us," Krach said.
Processing search warrants, for example, could be made more efficient if it were done electronically, Krach said. That's what is happening at the Butte County District Attorney's Office in Northern California.
That agency contracted with DocuSign to use its electronic-signature software. Now, rather than a sheriff's deputy having to drive a search-warrant application to a judge — which could be in the middle of the night — the warrant can be emailed, and the judge can sign off using a smartphone or laptop.
"We're excited about being able to use 21st-century technology," said Mike Ramsey, district attorney of Butte County.
At first, however, he was wary of putting sensitive information onto a digital cloud. "You want to keep the info away from the bad guys, because it could include the names of informants," he said.
Ramsey had the IT team at Butte County evaluate the software and they told him it was safe.
Asked about the security on DocuSign's servers, Krach said there is no danger of unauthorized eyes accessing sensitive information.
"All the documents are in the cloud, so they're totally encrypted," he said.
Karl Baker: 206-464-2046 or email@example.com
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