Digital contract management startup Clause has raised $5.5 million in a Series A round led by crypto merchant bank Galaxy Digital.
The funding round also saw investment from electronic signature pioneer DocuSign and Galaxy Digital’s EOS Venture Capital Fund, which is backed by EOS blockchain maker Block.one and other investors.
Founded in 2016, Clause offers blockchain-based solutions to facilitate the creation, storage and maintenance of digital contracts for businesses. However, it also offers clients these same services independent of blockchain technology – by using existing platforms such as Stripe or PayPal.
“Clause is a system that doesn’t rely on a particular blockchain,” the company’s founder and CEO, Peter Hunn, told CoinDesk, adding:
“It’s blockchain-agnostic and also blockchain-independent. What we mean by that is you can run Clause without the blockchain infrastructure at all. You could just have a contract that you sign using an e-signature service that then initiates a payment through Stripe or PayPal that you connect to that agreement.”
At the same time, Hunn says there are several unique benefits to facilitating digital contract execution on a blockchain. Namely, using a blockchain creates immutable audit trails for contract performance.
“One of the biggest problems with contract management today is that you really have no visibility into the events that occur under a contract after the point of signature,” Hunn said. “You really only have a record of the agreement at the point of signature. You don’t have a record of these post-signature events and that creates a lot of transaction costs.”
Today’s announcement of Clause’s Series A is not the first major fundraising round for the company. Back in 2017, the startup raised just over $2 million from lead investors BN Capital at Lerer Hippeau and London-based Seedcamp, which both participated again in the Series A.
Galaxy Digital’s Greg Wasserman and Mike Dinsdale will both be joining Clause’s board of directors.
“They both bring a wealth of enterprise experience,” Hunn told CoinDesk. “[Their] experience is very useful for Clause as it begins to grow into a much larger organization.”
Looking ahead, Hunn said the partnership with DocuSign will lead to new features.
“One of the big innovations we’re working on with DocuSign is the ability to extend DocuSign functionality from not just e-signature but also to perform other events you may want to do within DocuSign [natively].”
CEO Peter Hunn image courtesy of Clause
Correction (June 27, 2019 19:30 UTC): Peter Hunn clarified that Clause was founded in 2016, not 2015.