Factify wants to go beyond PDFs and .docx files by giving digital documents a brain of their own

Tel Aviv-based startup Factify emerged from stealth today with a $73 million seed round for an ambitious yet kitschy mission: to take digital documents beyond the standard formats used by most businesses — .PDF, .docx, collaborative cloud files like Google Docs — and into the age of intelligence.

For Mattan Gavish, founder and CEO of Factify, this isn’t just a software upgrade — it’s an inevitability he’s been obsessing over for years.

"The PDF file was developed when I was in elementary school," Gavish told VentureBeat. "The foundation of the software ecosystem hasn’t really evolved… someone has to redesign the digital document itself."

Gavish, a computer science professor and PhD at Stanford, admits that his fixation on administrative file formats is an anomaly for someone of his credentials.

"It’s a very unpleasant problem to obsess over," he says. "Given the fact that my academic background is AI and machine learning, my mom wanted me to start an AI company because it’s cool. I’m not sure why I obsess and then become obsessed with documents."

But that craze has now attracted a sizeable seed round led by Valley Capital Partners and backed by AI heavyweights like former Google AI chief John Giannandrea.

The stake is simple, the static rigidity of most digital files has limited their usefulness, and a better, smarter document that actually shares its editing and ownership history with users as intended is not only possible—it’s a multi-billion dollar opportunity.

The history of digital documents

To understand why the seed round would grow to $73 million, you have to understand the scale of the trap the businesses find themselves in. There are currently about three trillion PDF files in circulation. "Some people see PDFs more than they see their children," Gavish jokes.

The history of the digital document is not a linear progression where one format replaces another. Instead, it’s a story about "speciation," where different formats have evolved to fill distinct ecological niches: creation, distribution and collaboration.

The File Era: Microsoft Word (1980–1990)

Digital documents began as isolated artifacts. In the 1980s, "document" is inextricably linked to the hardware that created it. A file created in WordPerfect on a DOS machine was practically gibberish to a Macintosh user.

Microsoft Word, which traces its origins to the pioneering WYSIWYG editors at Xerox PARC, changed that by capitalizing on the dominance of the Windows operating system. By the 1990s, the .doc binary format had become the default container for editable professional documents. However, these files were structurally complex "memory dumps" designed for the limited hardware of the time, often resulting in corruption or privacy leaks where deleted text remains hidden in the file’s binary data.

The Digital Stone Age: PDF (1990s – 2006)

The PDF file was not created as a writing tool; it was a viewing tool. In 1991, Adobe co-founder John Warnock wrote "Project Camelot" white paper providing a "digital envelope" which will look identical on any display or printer.

Unlike Word files, which were malleable, PDF files were designed to be immutable. They used the PostScript image model to place characters at precise coordinates, ensuring visual precision. While adoption was initially slow, Adobe’s decision in 1994 to release Acrobat Reader for free established PDF as the global standard for "digital concrete"— the finality format used for contracts, government forms and records.

The Collaborative Cloud Document Era (2006-present)

In 2006, Google broke the mold again by moving the document from the hard drive to the browser. Usage "Operational transformation" algorithms, Google Docs allowed multiple users to edit the same stream of text simultaneously.

This shifted the paradigm from "send a file" to "share link." Although Google Workspace now has over 3 billion users (mostly consumer and educational), it has fundamentally changed the way we work – turning documents into living, collaborative processes rather than static artifacts.

The status quo: fragmentation

Despite these advances, the business world remains fragmented. We draft in Google Docs ( "Digital stream"), format in Word ( "Digital clay") and enter PDF ( "Digital Stone").

But this fragmentation comes at a price. "The problem is not in the document. That’s all around him," noted by the company. "Once the PDF leaves your system, the control disappears. Versions move. Access is unclear. Nothing is visible."

Transforming digital documents into intelligent infrastructure

Factify’s bet is that in the age of AI, this fragmentation is no longer just annoying—it’s a critical failure. AI models need structured, verifiable data to function.

When AI "reads" PDF, it is essentially guesswork using optical character recognition to scrape text from what is actually a digital photo.

"What we’re dealing with here is a megalomaniac vision, but at the same time it’s probably something that’s inevitable," Gavish says.

Factify’s solution is to treat documents not as static files, but as intelligent infrastructure. C "Factified" standard, the document carries its own brain. It has a unique identity, a live permission system, and an immutable audit log that travels with it.

"We wrote a new document format that replaces PostScript," Gavish explains. "We’ve created a new data layer that maintains the document as a first-class citizen… and is always available within the organization and potentially beyond."

This distinction—between a file and an API—is at the heart of the company’s pitch"

• Files are passive: They accumulate, are lost and can be stolen. "Returns to brick state," Gavish says. "Files are passive, if nothing else, because they just pile up there, you have to keep them."

• APIs are assets: A Factify document is an active object. You can ask him questions: "Who has seen you? When does it expire? Are you the most current version?"

« People don’t change, » but formats do

History is full of formats that tried to replace PDF (like Microsoft’s XPS). They failed because they required too much change in consumer behavior. Gavish is aware of this trap.

"When I talk to enterprise software entrepreneurs, I tell them the two laws they need to know about starting an enterprise software company are that people don’t care and nobody changes," he says.

To avoid this, Factify has built in deep backwards compatibility. A Factified document can look just like a PDF, complete with page breaks and margins. Users don’t have to learn a new interface to get value; they just need to solve a specific pain point—like an executive who wants to ensure that an investment note can’t be forwarded.

"All they have to say to their team is, « Dear Chief of Staff, the employment agreements and investment memorandums… will be verified. The rest of you go ahead," Gavish says. "They see an immediate benefit…but then find they’ve crossed the Rubicon."

What’s next for Factify?

Capital from this round will be used to deepen the core engineering of the platform, which Gavish describes as "heavy engineering lift" requiring them to rebuild the document format, data layer, and application layer from scratch. The company is also establishing a major operations center in Pittsburgh to support its US expansion.

Ultimately, Factify isn’t trying to create another collaboration tool like Google Docs. They are trying to build the immutable record of the future – the standard for "the truth" in a digital world.

"PDF… has become the standard, which means I can’t file my taxes in any other format. This is what victory looks like" Gavish says. "We create a document standard that is not specific to healthcare or insurance, but is simply a document as such."

For the three trillion static files currently sitting in cloud storage, the writing may finally be on the wall.

Infrastructure

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