SIGNING ON THE BOTTOM LINE
Silanis sold for $113M
If you’ve recently filled out a mortgage or an insurance contract in Canada by clicking in the box instead of signing on the dotted line, there is a good chance you’ve been using software by Montreal-based company Silanis Technology Inc.
Soon many more people around the world will likely be having a similar experience.
On Wednesday, the Swiss-U.S. Vasco Data Security International Inc. closed its $113 million acquisition of Silanis, the 23-year-old company that makes an electronic signature product called e-SignLive, in a move both companies hope will bring exposure to new markets through a growing technology for many businesses.
Tommy Petrogiannis, Silanis’ CEO, said that when the company began a financing event at the beginning of 2015, the goal was to raise funds to fuel international growth, which is increasing at three times the rate of people performing transactions electronically in North America.
While trying to raise funds, the management began talks with Vasco, which has only four per cent of its revenue coming from North America and the rest from Europe and Asia.
In early October, Silanis agreed to be acquired by Vasco while still retaining its 159 staff and Canadian office as a wholly owned subsidiary.
“It was perfect. We give them access to the North American market, and they give us access to the international market,” Petrogiannis said.
Though there has been widespread adoption of e-signatures in the private and public sector, many consumers don’t understand how the technology fits into their transactions.
To the average person, a digital signature — your name scribbled on a screen instead of on a piece of paper — may seem like the same thing as an e-signature.
In fact, electronic signatures have been recognized as a legal concept in Canadian and U.S. law for 15 years as a way to capture intent, and this can be as simple as clicking a box where a user agrees to certain terms and conditions.
“In the last few years we’ve really seen the market rapidly adapt to this type of technology and what’s driving it is that the end consumer wants to do all of this electronically. They don’t want to walk into a bank just to sign some piece of paper,” Petrogiannis said.
Silanis is a huge player in the world e-signature market, second only to DocuSign, a San Franciscoand Seattle-based company that has raised US$443 million from investors and employs over 1,000 people.
For investors in Silanis, the smaller company’s ability to do more with less made it worth the risk, even before the industry took off.
“From a capital efficiency standpoint they’ve been very, very good at leveraging a modest amount of capital compared with a lot of their competitors,” said Justin LaFayette, a managing partner at the Georgian Partners venture capital firm, which invested in Silanis in 2008.
Silanis had its first big break 20 years ago with big contracts in the U.S. military and then moved into Canada through big banks such as Royal Bank of Canada and Desjardins.
“We had to focus on markets that were internal. The bigger bureaucracy, the more value we added,” Petrogiannis said.
Today, the company also has major clients in Canadian insurance, government and health care, which have taken on the technology in hope of increasing the efficiency of keeping track of a large number of documents, often signed by multiple parties.
“Although Canada was later to the party, they’ve been adopting some of the most innovative solutions when it comes to working with their customers in the digital domain,” Petrogiannis said.
Tangerine Bank, the Scotiabank subsidiary that specializes in online savings accounts and products, introduced e-SignLive in the fall of 2014 for clients who want to transfer their TFSA, RRSP or RRIF from another financial institution.
Before this, clients would fill out forms on their computers, print the documents and then either fax or mail them to the bank, which would add five to 10 extra processing days in a best-case scenario.
Silanis says what’s most important about the acquisition is that it will expand the company’s reach into Western Europe, Australia and Asia, where over 80 countries have laws regulating electronic signatures.
“The economy has become very global and organizations want to do business with companies across the ocean,” Petrogiannis said. “We thought it made sense to be acquired by a company that has a truly global footprint.”