Hangzhou-based electronic signature service provider BestSign acquired rival 51signing on Wednesday.
This is the company's second acquisition in the Chinese electronic signature market. Prior to this, BestSign bought counterpart QuickSign in 2017. With the takeover of 51signing, it has extended its lead in the market. BestSign topped the Chinese electronic signature market last year with a 35.8% share, according to research firm iiMedia. 51signing, previously ranked third, has a 8.5% market share.
Founded in 2014, BestSign offers contract drafting and signing for various industries, allowing people to save time and paper on document signing and approval. According to iiMedia research, China’s electronic contract signing will surpass 20 billion contracts by the end of this year, and 37.4 billion by the end of next year.
“We will get bigger as the leading player in the market,” Yu Xiao, 51signing's chief executive said in the press release. In the first quarter of 2019, BestSign acquired several corporate clients such as KFC, Huazhu Hotels Group and Bright Dairy & Food. It now has 2.3 million corporate clients and tripled its sales from August 2018 to March 2019.
A push from the government is another reason why Chinese electronic signature companies have boomed. Since April, China’s State Council has allowed electronic contracts to be used in house and land transactions. The same month, the Shanghai government released an electronic contract platform and granted it the same legal status as paper ones.
A software-as-a-service platform like BestSign has been riding on the momentum of the government-backed internet revolution within industry. Highlighted in a report issued by National People’s Congress in March, the “internet plus” theme remains the government’s priority. BestSign sees more opportunities in cooperation with companies in logistics, leasing and other supply chain industries.
Given that private equity investment dropped in the first half of 2019, it might be a wise move for startups to merge instead of waiting for the money to flow again.
BestSign completed a $52.4 million Series C round of funding in August last year led by Tiger Global Management, with existing investors Matrix Partners China, DCM and Morningside Venture Capital. Prior to this, BestSign received Rmb100 million ($14.5 million) funding from Morningside Venture Capital, Matrix Partners China, DCM, Shunwei Capital and WPS in March 2018.
