Dropbox announced today that it intends to purchase HelloSign, a company that provides lightweight document workflow and e-signature services. The company paid a hefty $230 million for the privilege.
Dropbox’s SVP of engineering, Quentin Clark, sees this as more than simply bolting on electronic signature functionality to the Dropbox solution. For him, the workflow capabilities that HelloSign added in 2017 were really key to the purchase.
“What is unique about HelloSign is that the investment they’ve made in APIs and the workflow products is really so aligned with our long-term direction,” Clark told TechCrunch. “It’s not just a thing to do one more activity with Dropbox, it’s really going to help us pursue that broader vision,” he added. That vision involves extending the storage capabilities that is at the core of the Dropbox solution.
This can also been seen in the context of the Extension capability that Dropbox added last year. HelloSign was actually one of the companies involved at launch. While Clark says the company will continue to encourage companies to extend the Dropbox solution, today’s acquisition gives it a capability of its own that doesn’t require a partnership and already is connected to Dropbox via Extensions.
Alan Pelz-Sharpe, founder and principal analyst at Deep Analysis, who has been following this market for many years, says the fact it’s an Extensions partner should allow much faster integration than would happen normally in an acquisition like this. “Simple document processes that relate to small and medium business are still largely manual. The fact that HelloSign has solutions for things like real estate, insurance and customer/employee on boarding, plus the existing extension to Dropbox, means it can be leveraged quickly for revenue growth by Dropbox, Pelz-Sharpe explained.
He added that the size of the deal shows there is high demand for these kinds capabilities. “It is a very high multiple, but in such a fast growth area not an unreasonable one to demand for a startup showing such growth potential. The price suggests that there were almost certainly other highly motivated bidders for the deal,” he said.
HelloSign CEO Joseph Walla says being part of Dropbox gives HelloSign access to resources of a much larger public company, which should allow it to reach a broader market than it could on its own. “Together with Dropbox, we can bring more seamless document workflows to even more customers and dramatically accelerate our impact,” Walla said in a blog post announcing the deal.
HelloSign remains standalone
Whitney Bouck, COO at HelloSign, who previously held stints at Box and EMC Documentum, said the company will remain an independent entity. That means it will continue to operate with its current management structure as part of the Dropbox family. In fact, Clark indicated that all of the HelloSign employees will be offered employment at Dropbox as part of the deal.
“We’re going to remain effectively a standalone business within the Dropbox family, so that we can continue to focus on developing the great products that we have and delivering value. So the good news is that our customers won’t really experience any massive change. They just get more opportunity,” Bouck said.
Alan Lepofsky, an analyst at Constellation Research who specializes in enterprise workflow, sees HelloSign giving Dropbox an enterprise-class workflow tool, but adds that the addition of Bouck and her background in enterprise content management is also a nice bonus for Dropbox in this deal. “While this is not an acqui-hire, Dropbox does end up with Whitney Bouck, a proven leader in expanding offerings into enterprise scale accounts. I believe she could have a large impact in Dropbox’s battle with her former employer Box,” Lepofsky told TechCrunch.
Clark said that it was too soon to say exactly how it will bundle and incorporate HelloSign functionality beyond the Extensions. But he expects that the company will find a way to integrate the two products where it make sense, even while HelloSign operates as a separate company with its own customers.
When you consider that HelloSign, a Bay Area startup that launched in 2011, raised just $16 million, it appears to be an impressive return for investors and a solid exit for the company.
The deal is expected to close in Q1 and is, per usual, dependent on regulatory approval.