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DocuSign Acquires AI Contract Startup Lexion for $165M Amid Reported Sale Talks

In a strategic move amid reports of exploring a potential sale to private equity firms, DocuSign (now preferring to stylize its name as “Docusign”) has announced the acquisition of Lexion, a contract workflow automation startup, for $165 million. The purchase comes as Docusign continues to invest heavily in the contract management space, recently launching Docusign IAM, a service aimed at streamlining the corporate agreement creation and negotiation process.

Lexion, a company incubated at the Allen Institute for Artificial Intelligence (AI2), was founded by Gaurav Oberoi, Emad Elwany, and James Baird. Initially starting as a “smart” repository for contracts, allowing legal teams to ask natural language questions about documents, Lexion gradually expanded its offerings to address various use cases and challenges in document creation for teams across legal, sales, IT, HR, and finance departments. 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, Lexion’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 plans to integrate Lexion’s AI models for contract creation and negotiations, while Lexion will build integrations with Docusign’s existing products and solutions.

The acquisition comes at a pivotal moment for Docusign, a company valued at around $12.5 billion, which is reportedly in the process of exploring a sale to a private equity firm. In what could be seen as an effort to enhance its financial attractiveness, Docusign announced plans in February to lay off approximately 6% of its workforce, amounting to around 400 jobs.

Reuters reported in January that Bain and Hellman & Friedman are among the final bidders in an auction for Docusign, which could potentially be one of the biggest leveraged buyouts in 2024.

Docusign’s other recent acquisitions in the contract management space include SpringCM (in July 2018 for $220 million), a cloud platform for sales contract management, and Seal Software (in February 2020 for $188 million), a company specializing in AI-driven contract analytics.