Mechanism Capital co-led a $2.5 million pre-seed round for Diagonal, a platform designed to make subscription processing simpler for Web 3 companies. The subscription economy has grown rapidly in recent years, yet although numerous services exist to assist Web 2 companies in processing payments and subscriptions, Diagonal claims that Web 3 companies are essentially on their own.
Collecting subscriptions in a decentralised manner is not easy, and if done incorrectly, may result in firms and consumers paying unnecessary costs. Diagonal CEO Tony Rosler said his company’s goal is to provide Web 3 merchants with “an entire product suite to make payments as simple as possible,” which includes everything from connecting wallets and processing payments to handling accounting and sending subscription notifications to customers.
Rosler said that MetaCartel Ventures, The LAO, Coinbase Ventures, and other investment companies participated in the fundraising round, as did angel investors Ryan Selkis, Anthony Sassano, and others. The Diagonal team is hard at work constructing a public beta, which they want to launch first on the Ethereum layer 2 blockchains Polygon, Arbitrium, and Optimism.
Diagonal service is built on Superfluid technology, which allows Ethereum-based applications to begin payment streams between participants that settle instantly with low gas expenses. The company wants to set up a decentralised autonomous organisation (DAO) to run protocol governance in the future.