- Doxy Chain was developed for the interdisciplinary competition Global Legal Hackathon and enables document management while guaranteeing security and immutability of once saved data.
- To be able to develop the project, Gabriel Dymowski resigned from his job at the Warsaw Stock Exchange. Among those who believed in his idea were a lawyer and investor Jacek Bajorek and Wolters Kluwer publishing house.
- DoxyChain was the first Polish start-up to join Oracle’s Market Connect program.
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DoxyChain is an application for managing and storing digital documents using blockchain technology. The creator of the solution is a young team of developers and lawyers led by 25-year-old Gabriel Dymowski. The start-up is currently looking for funding on foreign markets and plans to raise at least €2 million by the end of the third quarter of this year. This budget will allow DoxyChain to scale its solution on a European level.
Anna Anagnostopulu, Business Insider Polska: DoxyChain was created as a solution for law firms. It was supposed to make it easier for them to issue, revoke and handle powers of attorney. How did you come up with the idea? How did you know the problems of this environment?
Gabriel Dymowski, co-founder and CEO of DoxyChain: The starting point for our solution was a Hackathon, specifically the Global Legal Hackathon, focusing on technologies for lawyers. While working on the project, we wondered why such large amounts of documents in law firms are still not digitized. The lawyers we spoke with emphasized one thing. They said they didn’t trust the systems available and that they weren’t secure enough to go digital.
Our liaison to the law firms is Marcin Lorenc, who is a lawyer himself. Based on his recommendations, we decided that we would focus on a solution for court mandates, which we programmed on the blockchain. Almost two years have passed since then and today the use of DoxyChain is much broader.
Let me ask you for an example.
One of our investors and first customers is Mr. Jacek Bajorek. He has a law firm that signed a large framework agreement with the city of Plock for legal services. Within this framework agreement other, smaller ones were created, e.g. for issuing a legal opinion on some issue. The city, through the secretary’s office, sent the inquiry how much time would it take the legal office to prepare such an opinion. The law firm responded, and the city commented. All this correspondence could be done by e-mail, with attachments in the form of Word files. We systematized business processes and then described them in our system, which allowed us to process all the steps within one platform.
All actions – sending a request, responding to it, agreeing or disagreeing – were recorded in the blockchain. When the target document was signed, you could read the event history and get all the information about it – not only about the signature but also about the whole negotiation process.
I imagine it as a cross between Google Docs and Slack instant messaging, popular even in editorial offices.
Exactly. What makes us different is the level of security we guarantee in our relations with external entities. We assume that within one organization people trust each other. Whereas when negotiations are between two separate entities, the greatest value we give them is the security of the documents and the undeniability of the information once recorded in them.
Imagine that we met today and are negotiating a contract for 200 thousand euros. The arrangements would have to be communicated to each other by email, and if we quarrel, it could even be a matter of dispute which final version of the contract we signed. With blockchain, there is no such possibility. From each previous version of the document, a hash is created, which uniquely identifies the changes made. In practice, this means that if you change even a comma in the agreement, the system will clearly indicate that this is a new version of the document.
Do both parties to a transaction need to be your client to work on DoxyChain?
No. A company that chooses to use our services sends a link to the contract to the counterparty via email. The person to whom the correspondence is addressed must go through a two-step authentication process. He clicks on the link and goes to the DoxyChain website. He sees the document but cannot sign it yet. He has to enter his phone number and then enter a code received via SMS. He accesses and signs the document without involving his organization.
Authentication by email alone is not enough for us, hence the need for a phone number. In the next two to three months, we want to add a video verification option.
How is the trust in blockchain among customers and investors? The UKNF regularly warns against investing in cryptocurrencies, with which blockchain is often equated.
When it comes to investors, we go to those who know the potential of the technology. Clients have typically heard of blockchain, or at least bitcoin, and want to understand what our solution is all about. However, there is no denying that some are distanced.
We feel it’s not easy for us, but we also know our value. When someone tells me that the regulator is warning about blockchain, I say: Ok, but do you know what PKO bank did recently? It digitalized the general terms of its contract with regard to blockchain. As a result, so far it has saved PLN 20 million by making 11 million contracts available to its customers.
Blockchain is the best technology for building coalitions of trusted entities. People stop trusting Facebook, Google, technology companies. We say: don’t trust DoxyChain, a young start-up. You yourself will be the guarantor of the reliability of the stored documents. Blockchain gives decentralization. Entities that want to co-create this system with us will maintain its vertices, i.e. replicated blockchain databases that sign off on the fact that no changes have occurred on the network. In short, it’s moving away from a single trust point to entities that co-create the system. It is also important to note that the UKNF warns against cryptocurrencies, which our solution is not associated with.
You say that you want to set European standards for document circulation and security. Have such standards already been defined, for example, at the EU level?
The European Commission is working on the construction of such standards, using blockchain. This year, a project is to be launched under which a distributed network of member states will be created, in which each country will maintain its top.
However, there are already regulations such as RODO or PSD2, the EU directive on payment services, to which we had to adapt. The right to be forgotten resulting from RODO strongly conflicts with, for example, the fact that on a blockchain, once stored, information is never lost. We managed to solve this problem thanks to an appropriate layer of anonymization. It is because of such technological and legal issues that we have been coming to the market for so long. We provide blockchain in the SaaS model (software as a service – ed.). So far there has been no such thing on the Polish market.
Photo: press materials From the left: Daniel Bigos, Rafael Schultz, Gabriel Dymowski, Marcin Lorenc, Piotr Żelazko.
How many entities are already using the platform and how many are testing it?
In 2020, we did a few single deployments, mostly in law firms. Currently, DoxyChain is testing about 20 entities from various industries. We have a base of several hundred companies interested in our service, which we will open to in the coming weeks.
How much will they pay?
99 PLN per user. If there are five people using the platform in a given company, the customer will pay PLN 99 for each of them separately.
You have recently said that you are planning to raise EUR 3 million from investors this year. What will they be used for?
Actually, I was talking about a round of 3 million euros. We currently have 2 million euros pledged from two foreign investors and we may stop there. As the president, I prefer to stick to a smaller budget and show the effects sooner. What the final amount will be will result from talks with investors.
We are looking for foreign funds because our goal is to enter European markets as soon as possible. So we need not only capital but also know-how. We have a really strong team, great developers, one of the partners lives in the fintech capital – Berlin. So we have exposure and opportunities to expand into the European market and that’s how we want to scale the product.
Our goal is to reach a thousand users in 18 months. We define the user as a medium-sized SME, where 4-5 people will be using our platform. This is the level at which the company will generate €100k of MRR and be ready for the next round of funding.
You have basically been working under pandemic conditions since the beginning of the company. On the one hand, it’s a lot of inconveniences, on the other hand, it’s an acceleration when it comes to digitalization.
We look at the results of DocuSign, a company that was the first in the industry. In a pandemic, it saw 30 percent year-over-year growth! This has never happened in its 20-year history.
Digitization has undoubtedly accelerated. Since the beginning of Pandemic, I’ve been getting inquiries about whether the platform has already taken off. What was once a revolution is now an evolution. Even public sector entities are in the process of digital transformation and I am sure that digital document management will soon become the standard.
Before becoming CEO of DoxyChain, you worked at the Warsaw Stock Exchange and were a member of the working group at the Ministry of Digitalisation, among other things. An impressive CV for a 25-year-old. Your partners also have something to boast about.
Indeed, our greatest value is the team. Piotr Żelazko, the main architect of the solution, is in my opinion one of the biggest blockchain talents in Poland. Together with Daniel Bigos, he is responsible for aspects of blockchain technology. We have Marcin Lorenc, an excellent lawyer of the young generation, also a member of the blockchain working group, thanks to whom we better understand the problems and needs of our clients. Rafael Schultz is opening doors for us to businesses in the international market. We also have a great business angel, Jack Bajorek, who immediately believed in our project. Finally, we are supported by ICEO, a company specialized in scaling start-ups, which has an incredible experience in the market.
As for me, I have devoted everything to this company. I worked at the Warsaw Stock Exchange, in the WSE Private Market project. I could build a new market using blockchain technology, create the history of the financial market in Poland. For a 24-year-old guy, it was something amazing and extremely prestigious. Only a few years earlier, the Polish Financial Supervision Authority warned against Bitcoin and blockchain, and since 2019 everyone is looking at what will happen on the WSE and how blockchain technology will be implemented on the Warsaw Stock Exchange. I learned a lot while working for the WSE and it made me very strong. I decided to leave when after the Legal Hackathon we started to be contacted by companies like PwC or IBM asking what our next step would be and convincing us that this idea has incredible potential. I left when we didn’t have funding yet, I bet everything on DoxyChain. I owe the knowledge I have today to the fact that I have smart people around me, older than me. I’m not afraid to ask them, I try to listen and take their advice. You can’t learn to swim if you don’t jump into a pool of deep water, and I always wanted to do business. So I decided to do business instead of working for a corporation.