What $760 Million Notarize Can Teach Other Startups About the Future of Work

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What $760 Million Notarize Can Teach Other Startups About the Future of Work

What $760 Million Notarize Can Teach Other Startups About the Future of Work

Last updated: Feb 15, 2023

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Startups like Notarize help companies digitize mundane, essential tasks--quietly powering a sustainable shift to remote work.

Notarize CEO Pat Kinsel founded the startup in 2015 after dealing with a notarization horror story of his own.

A few years ago, if you bought a house, signed an apartment lease, onboarded a new employee or even adopted a child, you may have found yourself typing “notary near me” into a search engine, trekking to the closest office you could find and signing a document in front of a licensed notary before you could make anything official.

Now, notarization--the process by which a commissioned notary public observes you signing a document or contract to confirm its authenticity and legality--can be done from the comfort of your smartphone, thanks to an intrepid startup called Notarize.

By digitizing a mundane yet essential task, Boston-based Notarize hopes to permanently shift how individuals and businesses operate. (Dozens of state lawmakers and corporate giants like Adobe have already jumped onboard.) Notarize’s strategy can teach other organizations about the practicalities of remote work, and it may also offer lessons about the types of startups that might be able to weather a looming potential recession.

“The genie’s not going back into the bottle,” Notarize founder Pat Kinsel told The Org. “Not just in our respect, but I think companies have really proven they can not only be successful, but there can also be real advantages to their business with more geographic flexibility.”

Reshaping the legal landscape

Notarize claims to “bring trust online,” and it does so by essentially serving as a 15-minute digital alternative to the inconvenient in-person notarization process. A user can pull up the Notarize app on their smartphone, snap a picture of their legal document and upload an image of a passport or other official ID to verify their identity. Next, the user gets directed to a brief video chat with one of the 4,000 licensed notaries on the startup’s platform, who will observe the signature as it happens.

Notarize promotes ease, but the startup’s own journey has been far from seamless. In fact, the company itself was born out of frustration. After a stint at Microsoft, Kinsel built a mobile data-collection startup called Spindle that he sold to Twitter in June 2013. But a clerical error almost tore the sale almost apart: A notary at a nearby UPS store had forgotten to sign a power of attorney document Kinsel needed to register his shares, effectively rendering it invalid.

“No one caught that for a while, it was a huge trauma,” said CEO Kinsel. “And I said to myself, ‘it's ridiculous that this notarized document has had such a negative impact on my own life…how can we solve this?’”

The uphill battle had just begun. When Notarize opened its doors in 2015, digital notarization was legal in just one state: Virginia. Today, it’s legal in 39 states; Maine became the latest to join the list after passing a new digital notarization law in April. Similar bills are currently pending in Massachusetts and Rhode Island. Kinsel led the legal charge early on, but the startup now employs more than a dozen lobbyists, the CEO said.

“It’s a very, very, very, very large team for a startup, most startups don't have full-time teams, period, even technology companies,” emphasized Kinsel. “Our public affairs team is larger than even much, much, much larger technology companies.”

Digital notarization meets the future of work

Startups like Notarize help companies digitize inconvenient (but essential) tasks--quietly powering a sustainable shift to remote work.

Prior to the pandemic, companies that needed to notarize internal documents might’ve relied on someone in the office who happened to have a notary license, or run to a FedEx down the street. Stacks of internal business documents often need to be notarized--tax forms, HR forms, employee onboarding materials, office space leases and more. A real estate company, for example, could contend with countersign loan agreements, permits for government filings and construction forms. Some companies actually shifted notarization responsibilities to customers or employees.

“What excites me about Notarize is that it's not something that just needs to happen when we're all stuck in our homes, but it is the future for completing the last mile of any enterprise transaction where verification is required,” said Jesse Wedler, a general partner at Alphabet’s independent growth fund CapitalG. (Wedler first invested in Notarize’s $130 million Series D in 2021 after tracking the startup for years.)

While Notarize serves individuals directly--charging around $25 per notarized document--its B2B unit is having a growth spurt. The enterprise customer count has expanded ten-fold since 2020, said Kinsel, as Notarize entered new industries like auto sales, retirement and private wealth management, which suddenly found themselves in need of digital notarization services during the pandemic.

Notarize’s enterprise customers include big names like Redfin and insurance giant TransAmerica). It also signed 10 Fortune 100 companies during the COVID-19 pandemic. In just the past few months, Notarize has launched partnerships with both FedEx and Adobe, and Kinsel says more are in the pipeline.

The road ahead for Notarize

Notarize isn’t alone in the market. Its biggest rival, DocuSign, launched a digital notarization service in October 2021. The publicly traded competitor sports a market capitalization north of $16 billion, nearly half of its early valuation in early 2022 before stocks started plunging broadly.

“I think that the challenge is getting enough people to experience [Notarize] and try it,” said CapitalG’s Wedler. “It's kind of like taking your first Uber ride…it's really foreign at first to hop in someone else's car. But the second you do it, it's like magic, and you can't really think about doing it differently.”

The rocky economy may also figure into Notarize’s future. More than two years after COVID-19 began sweeping the U.S., some early pandemic winners like Zoom and Peloton have watched valuations fall and demand dry up.

It’s a tough time for startups, and Notarize will have to prove its worth to potential investors as hiring freezes and layoffs spread among tech businesses. Notarize is valued at $760 million and has raised more than $210 million over the past seven years, according to PitchBook data. Its most recent fundraise, the $130 million Series D round, closed in March 2021. Canapi Ventures led the round, with participation from buzzy investors like Citi Ventures, Wells Fargo and CapitalG. It’ll likely have to raise again in the year ahead.

But for now, Notarize is trucking along thanks to permanent shifts to hybrid and remote workplaces. The business now employs more than 500 people across 42 states, up from about 90 workers prior to the pandemic. Notarize still retains its Boston HQ, but has made most of its operations remote.

“Everyone's trying to figure out what companies represent real, systemic, long-term change,” Kinsel said. “I feel really confident that we're in that category.”

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