DocuSign Acquires Lexion: AI-Driven Contract Management Firm Enhancing Digital Agreements

DocuSign is making significant moves in the business landscape as it reportedly seeks a sale to private equity while simultaneously acquiring a company of its own.

On Monday, DocuSign announced its acquisition of Lexion, a startup specializing in contract workflow automation, for $165 million. This acquisition aligns with DocuSign's strategy to enhance its investments in the contract management sector. Recently, the company launched DocuSign IAM, a service designed to integrate various aspects of the corporate agreement creation and negotiation process.

Lexion, which was incubated at the Allen Institute for Artificial Intelligence (AI2), was co-founded by Gaurav Oberoi, along with former Microsoft software development lead Emad Elwany and engineering expert James Baird. Oberoi previously co-founded Precision Polling, which was acquired by SurveyMonkey shortly after its inception.

Initially, Lexion functioned as a "smart" contract repository, allowing legal teams to pose natural language questions about their documents. Over time, it expanded its offerings, developing tools that cater to diverse challenges in document creation for teams spanning legal, sales, IT, HR, and finance departments.

Before the acquisition, Lexion had secured $35.2 million in venture capital from notable investors, including Khosla Ventures, Madrona, and Point72 Ventures.

DocuSign's CEO Allan Thygesen emphasized that Lexion’s technology will provide customers with a “more granular” insight into their contract structures and data, enabling the identification of key insights and potential risks. DocuSign plans to leverage Lexion’s AI models for contract creation and negotiations, while Lexion will integrate its solutions with DocuSign’s existing products.

This acquisition is particularly timely for DocuSign, which is currently valued at approximately $12.5 billion and is reportedly in discussions to sell itself to a private equity firm. To enhance its appeal to potential buyers, DocuSign announced plans in February to reduce its workforce by about 6%, translating to around 400 job cuts.

In January, Reuters reported that Bain and Hellman & Friedman were among the final bidders in an auction for DocuSign, potentially positioning it for one of the largest leveraged buyouts in 2024.

DocuSign's previous acquisitions include SpringCM, a cloud platform for sales contract management, purchased for $220 million in July 2018, and Seal Software, which specializes in AI-driven contract analytics and was acquired for $188 million in February 2020.