Datasite is one of the leading virtual data room providers known for streamlining complex financial transactions like M&As, IPOs, corporate restructuring, and fundraising. It serves a large number of industries, including private equity firms, investment banks, and law firms.
The following is a detailed Datasite review that focuses on how it can help investors with dealmaking, due diligence, and portfolio management.
About Datasite
Datasite, previously known as Merrill Corporation, is a modern platform that offers advanced solutions needed for dealmaking in one place. The company started operations in 1999 and is part of Datasite Global Corporation, with its main office located in Minneapolis, United States.
Datasite VDR helps simplify each stage of a transaction, including deal preparation, due diligence, and post-merger integration. It offers useful features like:
- A secure Sandbox for testing
- AI-powered analytics to support better decisions
- Accurate document redaction
- Organized Q&A processes, and
- A “View As” option to check different user perspectives
In simple words, Datasite gives dealmakers and investors the tools they need to speed up and improve the quality of their deals. That is why industry giants like Johnson & Johnson and Goldman Sachs are amongst Datasite’s clientele.
Key features for investors
Datasite virtual data room offers advanced features for efficient dealmaking.
1. Document organization and secure access controls
Investors can organize their confidential data in whatever manner they want. Datasite data room allows categorizing files in folders and subfolders and building a data room index. There are built-in checklists to ensure the dealmakers have everything in the right order. The administration can also control user access according to their needs.
2. Real-time activity tracking and audit trails
Datasite allows the VDR administration to track user activities in the data room. That means the admin can easily see what users are doing in the data room. It also provides complete details on files accessed, changes made, and how much time users spend on different documents. These audit logs keep the process transparent and provide records for future audits.
3. AI-powered document categorization and redaction
Document management features are truly remarkable in Datasite. The AI-powered document categorization feature automatically arranges similar files without manual input.
Similarly, the AI-powered redaction simplifies erasing sensitive data from documents. The data room admin just has to specify which type of data needs to be erased, and the redaction feature will do the rest. These features are highly important during due diligence when sharing data with external parties.
4. Permission-based access for portfolio companies or co-investors
Permission-based access feature allows management to control who can see or access particular files and folders in the data room. This gives dealmakers more control when sharing sensitive information during dealmaking.
5. Integrated Q&A workflow for streamlined due diligence
The Q&A management system in Datasite allows you to categorize Q&A sections, assign coordinator questions, and set workflows. The messenger-like tool allows asking questions and submitting answers as well as sharing attachments.
User experience and interface
Datasite scores 4.6 in the “ease of use” category on Capterra (a highly trusted software review platform). Here is how it makes things easier for users.
1. Dashboard and navigation for reviewing large volumes of documents
Datasite’s user-friendly dashboard gives users a clear overview of the data room. This makes it easy for users to access any document or section, move through folders, and track performance during the transaction.
2. Search and filtering options
Users can easily search or access any document in the Datasite virtual data room. They can use search filters like document type, tags, and date, or can set any other custom criteria. Users can save a lot of time as they don’t have to move from folder to folder to access their desired files.
3. Mobile accessibility for on-the-go deal review
Datasite supports multiple operating systems for mobile access. It supports Android, Windows, iPad, and iPhone users. Remote access makes sure users can access documents, answer other users’ queries, and easily monitor deal progress from their mobile devices.
4. User roles and ease of managing access levels
Datasite provides strong, granular user permissions for highly secure document management. Admins in the data room can define access boundaries for other users. That may include who can or cannot access a certain file or a particular section of it.
Security and compliance
Datasite is well known for its industry-leading data security features.
1. Certifications
The data room maintains industry-grade security by complying with regional and global standards. Datasite is ISO 27001, ISO 27017, and SOC 2 certified, which makes it a trusted data room for global investors.
Datasite is GDPR compliant, which ensures that organizations can use it to deal with clients based in Europe. The FedRAMP certification makes Datasite a secure VDR in the US.
2. Two-factor authentication and encryption
The two-factor authentication feature in the Datasite data room ensures that only legitimate users can access the VDR after going through a two-phase identity check process.
The data room offers 256-bit SSL/TLS encryption, which uses a 256-bit key for data encryption and decryption when shared between users. It is also one of the strongest forms of data encryption in the world.
3. Control over document access, downloads, and printing
Merrill virtual data room software allows admins to control document access and prevent users from editing, downloading, or printing confidential documents.
Datasite also offers many other advanced security features, like:
- Single sign-on
- View-only access
- Remote document shredding
- Access expiration
Use cases for investors
Investors can use the data room in various ways. Here are some key use cases.
1. Evaluating investment targets during due diligence
Investors can use Datasite’s data room to review financial statements, customer contracts, and operational reports of a potential acquisition target. For instance, a private equity firm assessing a tech startup can analyze revenue trends and legal risks all in one place.
2. Collaborating with legal and financial advisors
Investors invite external lawyers and accountants into the data room to examine compliance documents, tax records, and valuations. This makes it easy to coordinate edits, track version history, and get expert input in a single place.
3. Monitoring sell-side documentation during exit planning
In the case of selling a portfolio company, investors can oversee all marketing materials, disclosure schedules, and arrange Q&A with potential buyers. For example, a venture capital fund tracks which documents potential buyers have viewed to measure their interest in the deal.
4. Sharing files with limited partners or internal investment committees
Datasite allows investors to grant controlled access to fund performance reports, deal memos, and due diligence findings. This helps investment committees or LPs review materials quickly and make informed decisions on commitments or approvals.
Datasite pricing overview
There is nothing about Datasite pricing on the company’s official website. Customers have to contact the sales team to get a custom quote for their project. However, Datasite offers a free demo and 14-day free trials, which allow customers to get a test ride before committing. Datasite pricing can be a weak spot for the company, as it is difficult for potential customers to estimate the cost of the project without contacting the sales team.
Pros and cons
| Pros | Cons |
| · Designed for complex financial transactions· Automatic document translation feature available· Strong security and compliance credentials· Users can bulk-import Q&A from Excel templates· Advanced tools for fast due diligence | · Pricing may not suit smaller investor groups· Some learning curve for new users |
Customer support and onboarding
Datasite has an ever-ready customer support, covering 20 different languages. Here are some highlights of the Datasite customer support.
· 24/7/365 customer support via email, phone, and online help center.
· A dedicated personal manager to provide expert guidance throughout the process.
· Webinars, documentation, and in-person training.
Conclusion: Is Datasite right for investors?
Datasite is an advanced business software that helps protect large volumes of sensitive information in M&As, private equity deals, corporate restructuring, and similar transactions.
The data room offers advanced features for secure data sharing and more automated workflows. The data room strictly complies with international security standards.
These qualities make Datasite data room a top choice for venture capitalists and investment firms. However, it may not be a suitable option for individual investors as it is quite pricier as compared to other data room providers.
