Notaries are authorized to verify identities and serve as witnesses, ensuring legal documents are signed by the correct parties. The market is sizeable, with some 1.2 billion transactions reportedly requiring a notary each year in the U.S. alone, according to Notarize.
People have traditionally had to notarize documents in person, with the notary in the room. But as esignatures have gained traction in recent years — replacing the need to print, sign, and send or scan documents — notary services have been going digital, though at a slower pace.
While electronic signatures are accepted for a range of transactions, they are not always regarded as “legally sound,” especially in high-stakes transactions. Back in 2016, for example, a California court found that bankruptcy paperwork signed using DocuSign should have been signed with ink. The ruling noted:
Although DocuSign affixations and other software-generated electronic signatures may have a place in certain commercial and other transactions, they do not have a place as substitutes for wet signatures on a bankruptcy petition, schedules, statements, and other documents filed with the court, and they do not comply with this court’s local rule.
Digitally notarizing a document won’t necessarily satisfy all local jurisdictions, but it further legitimizes the esigning and verification process. As such, platforms like Notarize could help make esignatures standard practice across industries and transaction types.
Founded in 2015, Notarize provides the platform for signing documents, along with a notary who can verify the participants in a transaction. Working across PCs, tablets, and smartphones, Notarize enables users to upload a PDF or snap a photo of a paper document, verify their identity, and connect with a notary across a two-way video stream. The notary completes the final verification and adds their own signature and “seal” digitally, and the user can download the fully notarized document. The platform also supports multiple participants when additional witnesses are required by law.
Notarize had previously raised around $47 million, and the fresh $35 million will enable it to “quickly scale to meet unprecedented demand.” The funding round, which closed in March, was led by Camber Creek, a VC firm focused on real estate, and Polaris Partners.
Notarize announced its raise on the same day esignature giant DocuSign revealed it is paying $38 million to acquire Liveoak Technologies, a platform that combines video conferencing, screen-sharing, and ID capture to facilitate remote agreements. Alongside this acquisition, DocuSign also announced DocuSign Notary, which is designed for “high-value agreements” that require notary services.
Notarize said its platform has seen “rapid adoption” throughout the COVID-19 crisis, particularly in the real estate realm, where its notary services had been closing $7 billion in deals. Other areas where it has seen a spike in demand include retirement withdrawals and health care proxies.
Elsewhere in the legal sphere, DoNotPay last month raised $12 million to expand its bot-based system that helps consumers appeal parking tickets, cancel memberships, sue robocallers, claim compensation, and fight corporations. The San Francisco-based company also reported a surge in demand due to the pandemic.