Digital contract management startup Clause has recently closed a $5.5 million Series A funding round led by Galaxy Digital, including a strategic investment from electronic signature pioneer DocuSign, the firm announced in a press release.
Clause, which was founded in 2016, is a firm known for providing blockchain-based solutions which facilitate the creation, storage and maintenance of digital contracts for businesses. Its systems are not only blockchain-agnostic, meaning they can be used on any blockchain, but can also be used on non-blockchain platforms, such as Stripe and PayPal. Peter Hunn, founder and CEO of Clause, told Coindesk:
“Clause is a system that doesn’t rely on a particular blockchain. 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.”
According to the press release, the funds raised will be used to accelerate the company’s development efforts and expand its engineering team. The company has also welcomed two new members to its Board of Directors – Mike Dinsdale, the current CFO of Gusto, and Greg Wasserman, Co-Head of Principal Investing at Galaxy Digital. Clause has also partnered with DocuSign, which according to Hunn, will lead the company to develop 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.”
Even though the Clause system is blockchain-independent, Hunn has acknowledged that there are unique benefits of executing digital contracts on a blockchain. Most notably, blockchain has the ability to create immutable audit trails for the performance of the smart contract. He has said:
“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. 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.”
In September of last year, Clause also partnered with LegalZoom, a provider of online legal solutions, with the goal of providing smart legal contracts to individuals and small businesses. The collaboration enabled LegalZoom to provide its users with access to blockchain computable contracting technologies.