Flush with $130 million in cash following an October 2012 financing, email and Web security provider Barracuda Networks has acquired mobile e-signature startup SignNow. Neither company announced the transaction publicly, but a trail of Internet breadcrumbs left over the last two weeks make such a disclosure unnecessary.
First, the bottom of SignNow’s website reads “© 2013 Barracuda Networks. All rights reserved.,” and similarly, the app listing in the Google Play store – updated on April 30 – lists Barracuda as the seller. Next, a nine-day-old job posting indicates that Barracuda is looking for a Senior Web Developer to work on the SignNow app. Finally, according to a Tweet from Barracuda recruiter Robert Anderson, the startup also gave a presentation in front of its new acquirer late last week.
A member of the SignNow team confirmed the acquisition, speaking on the condition of anonymity. Asked whether the transaction was a positive outcome for the company’s founders and investors, the employee said “very much so,” but declined to discuss further specifics of the transaction.
It’s hard to put too much stake into such appraisals without more information, or that from a more independent source. Newport Beach, California-based SignNow had raised $2.5 million in funding, with the majority of that coming in a March 2012 Seed round from Khosla Ventures. LinkedIn lists 11 employees of the company, but this does not include two of the company’s three co-founders and senior execs, CEO Christopher Hawkins and President Andrew Ellis.
With a probable pre-money valuation of between $6 million and $8 million at the time of its Seed round, and given that the company appears to have been growing healthily, it’s likely that a valuation of at least $20 million to $30 million would have been necessary to make the acquisition attractive to all parties. Barracuda certainly has the cash, but there’s no telling how much value the security giant would put in this service.
SignNow allows users to sign digital documents using only their finger and a touch-based mobile device. The company competes in this category with with Docusign, EchoSign, RightSignature, and others. The company achieved a measure of notoriety last summer when NBA superstar Deron Williams tweeted a picture of himself singing his $100 million contract using the SignNow app.
SignNow also owns and operates NotaryNow, a webcam-enabled remote notary service. Both of SignNow’s products fit nicely within Barracuda’s offerings as the company is increasing its focus on the mobile and small- and medium-sized business (SMB) markets.
According to public reports, Barracuda is profitable and generates hundreds of millions of dollars in annual revenue. The company claims more than 150,000 customers and more than 1,000 employees in 16 countries. Many expect Barracuda to follow in the footsteps of its competitor Palo Alto Networks and list its shares publicly in the near future.
With three-year-old SignNow operating in a competitive space with limited capital raised, it’s not surprising that the company sought the backing of Barracuda. Whether you consider the startup’s early exit a win or a capitulation, adding the resources and customer network of an established acquirer to its popular technology should give the company a significant leg up in the market.