Dropbox Inc. is spending $165 million to acquire DocSend Inc., a San Francisco startup with a service that enables workers to share documents via email more easily.

The deal, announced today, is expected to close by the end of the month. 

DocSend’s namesake service provides many of the same features as Dropbox. Users can organize their documents in cloud-based folders and send links instead of attachments when they wish to include a file into an email. To enhance its customers’ email-based file sharing workflow, DocSend also provides a number of more specialized features, which are at the center of Dropbox’s decision to acquire the startup. 

DocSend includes an analytics console that allows users to track how recipients interact with shares files. The service can send a notification when a recipient opens a document and provides related data such how long they spent reading it. Such information can be useful in a range of scenarios, DocSend says, such as when a startup’s leadership shares a financial presentation with potential investors and may want to know if they viewed the file.

Startups were DocSend’s original focus when it launched in 2013. “Our roots are in helping startups navigate the fundraising process and empowering entrepreneurs to chase their dreams by giving them more visibility and control over the pitch process,” DocSend Chief Executive Russ Heddleston said in a statement. Heddleston added that “as we’ve grown, we’ve realized that the ability to securely share content and engage with documents after they are sent offers powerful benefits to a variety of customer segments.”

Alongside the ability to track how users interact with documents, DocSend provides security controls that help prevent file access by unauthorized parties. DocSend customers can protect documents with a password that is only shared with the intended recipients. They can also revoke access any time, which helps reduce the risk of data leaks in scenarios where a sensitive file is accidentally shared in a way it’s not supposed to.

Dropbox will integrate DocSend’s features with its namesake platform and its HelloSign business’ electronic signature technology. The company is aiming to give customers the ability to manage the process of sharing documents “from start to finish,” said Dropbox CEO Drew Houston. The vision is to let users store files in Dropbox, share them with the help of DocSend’s service and, when they need to collect signatures, use HelloSign.

In the near term, the acquisition will create new deal opportunities for Dropbox by allowing it to sell DocSend’s technology to its existing customers. Dropbox claims more than 600 million users worldwide. Only a small portion of them are likely already using DocSend given that the startup’s website states about 17,000 companies rely on its service. In the longer term, meanwhile, the deal will help Dropbox up the ante against chief rival Box Inc. by enabling it to offer an expanded set of features.

Both Box and Dropbox have been extending their platforms with increasingly specialized features in a bid to gain a competitive edge. Besides tools for specific use cases like sharing files over emails, the companies are also adding vertical- and department-specific capabilities. Dropbox in September introduced new tools aimed at creative professionals, while Box recently debuted new file security controls for information technology teams. 

Image: Dropbox