Cynix

Jay Jumper ran ProInvest, a financial services firm that provided managed accounts to 401k providers. He saw a growing problem: as more people withdrew from 401ks than contributed, his clients needed a way to keep assets through IRA rollovers, and the paperwork was heavy. Electronic signatures looked like the answer.

In 2002, a struggling e-signature company that had burned through cash after the dot-com bust was looking for help. ProInvest became a customer, then a major investor, and eventually bought the remaining company after a third party failed to complete a planned acquisition. Jay described the logic plainly: he saw the need inside his own business and across the market, and he believed it was a matter of when, not if, the market would take off.

The company Jay bought had two customers when he acquired it. He kept the key engineers and rebuilt the product around a different approach. Most e-signature vendors put a signature in an overlay that links back to the provider, which makes validity dependent on that vendor existing forever. Cynix instead uses PKI, a roughly 50-year-old security infrastructure, moved to the cloud, and embeds digital certificates in the document itself. Jay said the team focused on security first and added ease of use later, arguing that adding ease of use is easier than adding security.

Cynix's growth came mainly through partnerships. Rather than selling direct, it white-labels its solution to software companies that already have large customer bases. Jay's example: a software company with 10,000 customers paying $250 each has a $2.5 million signature opportunity it can capture with a private-label product. Revenue is shared with the partner, and pricing is standardized by industry to prevent partners from undercutting each other. Jay said about 80% of the business flows through software partners.

The partner model let Cynix reach highly regulated industries without partners building compliance themselves, and it scaled to about 700,000 seats. Jay also said the company has been capital-efficient and has self-funded for much of its history, with outside capital raised to pursue the larger market opportunity. He declined to disclose revenue, so the scale of the business cannot be confirmed from the interview.

Cynix has around 50 employees, about a third of them engineers, based in Chattanooga, Tennessee, with remote staff elsewhere. Jay described the company as being in a land-grab phase of a competitive, fragmented market and expects many big winners to emerge.