Business tools have gone completely virtual in the last 20 months due to the COVID-19 pandemic, and today a startup whose e-document platform has played a big role in supporting that shift is announcing a big round of funding on the heels of huge growth. PandaDoc, which lets users create, share and sign official documents online, has closed a Series C that the company confirms values it at $1 billion.
To be clear, PandaDoc is not making public the full amount of funding in this round. The company is based out of San Francisco, but it has extensive operations in Belarus, where it has been in hot political water -- several employees were arrested by authorities over a year ago there after publicly protesting the current regime. The lack of disclosure on the size of this round is intentional and related to this. From what we understand, that situation is still ongoing.
OMERS Growth Equity and G Squared are co-leading this Series C, and Altos Ventures, Rembrandt Venture Partners, One Peak Partners and Microsoft's venture arm M12 are also participating.
Prior to this, PandaDoc had raised around $36 million and its valuation was around $255 million, according to data from PitchBook. The big hike in valuation with this round can also be seen as a marker of the size of the Series C.
Today PandaDoc -- which competes with the likes of DocuSign, Eversign, DocSend, GetAccept and others -- already provides a range of services to users across many different verticals. Content ranges from building and collecting e-signatures and payments around contracts, proposals and forms through to invoices; and PandaDoc's users are also pretty varied, including construction, education, medical and professional services businesses -- some 30,000 customers in all. The plan will be to double down on growing more of that current business as well as bring more functionality and use cases into the fold.
"We plan on getting broader and deeper in the areas where we already play," Mikita Mikado, PandaDoc's CEO and co-founder, said in an interview with TechCrunch. Its contract management product is one of the most popular already in the market, and PandaDoc claims that its e-signature solution is one of the top three in terms of ubiquity. "We are going to continue competing in these areas, but at the same time we plan to go global this year and invest in localization and international growth."
That comes on the heels of an already strong business. PandaDoc's customers are currently distributed across some 130 countries, and in the last year its user base has grown by 80%, with revenues jumping 63%. (The company's business model is based around a freemium model, where basic e-signing is free -- notably, a tweak it made at the start of the pandemic, and perhaps one reason it's one of the top three e-signing solutions today -- and additional features and usage are priced in $19/month, $49/month and enterprise-scale "let's talk" tiers.)
The "let's talk" tier is important in the context of this investment. Small and medium businesses are the company's bread and butter, but investors see an opportunity in selling up market, too, by way of vastly expanding the features that it provides to customers.
“As a leader in the SMB segment, we believe the company is uniquely positioned to challenge current incumbents with a dynamic full-stack product that goes far beyond e-signing," Larry Aschebrook, managing partner at G Squared, said in a statement. "The management team is one of the best we’ve seen, and we look forward to supporting their creative and efficient approach to this fast-growing space.”
Mikado puts it a different way: "The more workflows that we can automate and achieve and do over time, the better."
PandaDoc's widening window of opportunity is a sign of the times.
COVID-19 has precipitated a huge amount of so-called "digital transformation": organizations that in the past used to carry out a lot more work in physical environments, were essentially, overnight, asked to shift all of that into digital, virtualized formats.
While that has definitely seen companies make bigger infrastructure and operational shifts, it's also played out on a more immediate services level. Specifically, daily materials like documents that people have long relied on in physical formats still were getting created, shared and made official, but now all of that needed to be done in a digital format: that ushered in a big wave of business to companies like PandaDoc.
The company got its start, Mikado said, with B2B sales, "but we have started getting requests from organizations that have other use cases that aren’t in the same bucket, such as schools, government institutions and healthcare organizations trying to streamline their employee onboarding, for example."
It's partly because of this trend that investors have been swarming around enterprise tech. The other main reason in this case is that PandaDoc has proven to be one of the solutions that's seen a lot of traction.
“We are proud to have led this new investment in PandaDoc -- a highly-innovative company that is shaping the future of documents, through its robust, all-in-one document automation platform," said Mark Shulgan, managing partner and head of OMERS Growth Equity. "PandaDoc is a leader in the document automation market, and its solutions allow businesses to increase efficiency, reduce costs, and accelerate their growth. We are thrilled to support Mikita Mikado’s ambitious vision, and look forward to supporting him and his team in this further evolution."