PandaDoc, the startup that provides a fully digital sales document workflow from proposal to electronic signature to collecting payment, announced a $30 million Series B extension today, making it the second such extension the company has taken since taking its original $15 million Series B in 2017. The total for the three B investments is $50 million.
Company co-founder and CEO Mikita Mikado says that he took this approach — taking the original money in 2017, then $5 million last year along with the money announced today — because it made more sense financially for the company than taking a huge chunk of money all at once.
“Basically when we do little chunks of cash frequently, [we found that] you dilute yourself less,” Mikado told TechCrunch. He said that they’ve grown comfortable with this approach because the business became more predictable once it passed 10,000 customers. In fact today it has 20,000.
“With a high-velocity in-bound sales model, you can predict what’s going to happen next month or [say] six months out. So you kind of have this luxury of raising as much money as you need when you need it, minimizing dilution just like public companies do,” he said.
While he wouldn’t discuss specifics in terms of valuations, he did say that the B1 had 2x the valuation of the original B round and the B2 had double the valuation of the B1.
For this round, One Peak led the investment, with participation from Microsoft’s Venture Fund (M12), Savano Capital Partners, Rembrandt Venture Partners and EBRD Venture Capital Investment Programme.
Part of the company’s growth strategy is using their eSignature tool to move people to the platform. They made that tool free in March just as the pandemic was hitting hard in the U.S., and it has proven to be what Mikado called “a lead magnet” to get more people familiar with the company.
Once they do that he says, they start to look at the broader set of tools and they can become paying customers. “This launch helped us validate that businesses need a broader workflow solution. Businesses used to think of the eSignature as the Holy Grail in getting a deal done. Now they are realizing that eSignature is just a moment in time. The full value is what happens before, during and after the eSignature in order to get deals done,” Mikado said.
The company currently has 334 employees with plans to hit 380 by year’s end and is aiming for 470 by next year. With the office in San Francisco, Belarus and Manila, it has geographic diversity built in, but Mikado says it’s something they are still working at and includes anti-bias programs and training and leadership programs to give more people a chance to be hired or promoted into management.
When it came to shutting down offices and working from home, Mikado admits it was a challenge, especially as some of the geographies they operate in might not have access to a good internet connection at home or face other challenges, but overall he says it has worked out in terms of maintaining productivity across the company. And he points out being geographically diverse, they have had to deal with online communications for some time.