Our Investment in Modria
We are pleased to announce that we’ve completed an investment in Modria. Located in San Jose, CA, Modria is building an online dispute resolution and mediation platform.
With the explosion of online activities, people are transacting at a rate never before seen. This obviously includes ecommerce, but also includes mundane things like paying bills online, reviewing property assessments, filing insurance claims, and other things that used to be non-digital activities. It is inevitable that all of these new transactions will generate an enormous amount of disputes that need to be resolved.
Companies like eBay have long known that the challenge of providing effective redress can either be an asset or a curse. In a well-functioning online marketplace, technology allows the participants to quickly resolve their issues without human intervention most of the time. In the case where human mediation is needed, the light touch of a customer service representative takes the place of lawyers and courtrooms. In the case of eBay, dispute resolution has become one of their most important customer loyalty programs.
In our marketplace theme, we surmise that good companies will be built that remove friction from folks who want to conduct business with each other, but due to lack of technology cannot. We believe that the dispute marketplace is ready for this change. As an aside, just last week, the U.S. Supreme Court ruled that arbitration clauses in contracts are enforceable in almost all situations, meaning that companies who wish to avoid the courtroom legally have the right to. We believe this will only increase the situations where disputes are handled in alternative and technologically-enhanced methods.
Modria is a spin-off from eBay that has recently released their online dispute platform. They deliver a SaaS solution that allows anyone to use the tools that have defined the clear market leader’s (eBay) dispute center. The company intends on focusing on the $1.1 billion market that includes ecommerce, property tax assessment, state and local government disputes, and insurance disputes.
The company was founded by Colin Rule who previously created and built the dispute resolution platform that eBay uses today. He is also widely seen as the thought leader in the online dispute resolution ecosystem and has written what is considered the definitive book on the subject. As part of this financing, we are also bringing on Scott Carr as CEO. Previously Scott was CEO at YottaMark and head of sales and marketing at Digimarc.
The company met Jason at a “future of the law” conference where both Colin and Jason were speakers. Jason mentioned on stage that he believed most startups focused on the legal industry would fail due to the complications of selling into law firms and legal departments. Colin approached Jason directly with a different approach, which fits nicely into our marketplace theme
Welcome Scott, Colin and team to the Foundry family!