Legal Tech Investment and M&A Tracker
Legal tech platforms have been gaining popularity around the world in recent years, resulting in a market valued at an estimated at $29.8 billion at the end of 2022, according to Reuters data, and that is expected to continue to grow at a compound annual growth rate (CAGR) of 8.9 percent in the next decade. Consisting of technology and software that aims to improve and/or streamline legal services and processes, legal tech encompasses the application of various technologies, such as artificial intelligence (“AI”), machine learning, cloud computing, automation, and data analytics, among others, to enhance the delivery, efficiency, and accessibility of legal services. Specifically, tech-driven innovation is assisting firms in case management, document drafting, legal research, e-discovery, risk management, etc.
While the legal industry has traditionally been slow to embrace technology, the onset of the pandemic – and more recently, the growing adoption of AI across industries – has led to an increase in software and services offerings (including in the realm of generative AI), and a notable number of mergers, acquisitions, and funding rounds. In order to get a handle on what legal tech providers are garnering the most traction – and funding – and to take the temperature of this space more broadly, we have compiled a (running) tracker of legal tech funding and M&A …
Jun. 1, 2023 – Doormat Raises $1.25M in pre-Seed Round
Doormat has raised $1.25 million in a pre-seed round led by Alate Partners with participation from The LegalTech Fund, Erin Bury of Willful, Brandon Chu formerly of Shopify, alongside additional angel investors. The Toronto-based startup – which “enhances the client experience and streamlining the legal process with advanced technology solutions to bring much-needed simplicity and ease to the real estate buying and selling process in Canada” – will use the new funds to expand its existing operations and reach. Co-founder and CEO Robert Saunders said in a statement, “With the housing market slowly experiencing a rebound, we want Canadians to have access to a real estate tool kit and Doormat is a part of that. We are igniting change, driven by a disruptive passion to redefine the way we navigate the world of real estate.”
May 23, 2023 – Steno Raises $15M in Series B
Steno has raised $15 million in a Series B round led by Left Lane Capital with participation from Clio Ventures. The Los Angeles-based tech-enabled provider of legal support services will use the new funds to “continue growing its presence in new markets across the country, develop adjacent service channels for its clients, and expand its tech team.” The Greg Hong, Dylan Ruga, and Dan Anderson-founded company provides court reporting services combined with technology and deferred payment options. Ruga said in a statement in connection with the round, “As a plaintiff attorney, I found myself in a spot where all of my working capital was tied up in case costs. I couldn’t grow my business, there were no court reporting agencies that would defer costs until my cases settled, and securing litigation financing was resource-draining for my staff. I called Greg and Dan with the idea, and Steno took shape.” The company has raised a total of $38.5M, including a Series A round completed in fall 2020 led by Trust Ventures.
May 19, 2023 – Orbital Witness Raises £7.5M in Series A
Orbital Witness has raised £7.5 million in Series A round led by Parker89 and joined by LocalGlobe, Outward VC, Seedcamp, Portfolio Ventures, and Realty Corporation. The London, UK-based company will use the new funds to expand its 40-strong team and build key partnerships across the property market. Co-founded by Will Pearce and Ed Boulle in 2018, Orbital Witness leverages machine learning and AI to enable lawyers and property professionals “to manage the complex, labor intensive, and heavily regulated diligence process.”
May 15, 2023 – Clara Lands New Investment from Plug and Play
Clara has announced a new investment from – and partnership with – Silicon Valley-based innovation platform Plug and Play to further build out its legal operating system. Dubai-headquartered Clara boasts a “category-creating legal operating system that digitizes and automates legal tasks for founders, including digital company formations, cap table and data room management, and automated legal document generation (covering SAFEs, ESOPs, and more), all supported by the platform’s predictive educational function.” The new partnership will give Plug and Play access to Clara’s product line as well as bespoke instructional support that Clara and Plug and Play will co-create.
The investment from Plug and Play follows from an April 2022 investment from The LegalTech Fund, which coincided with the platform’s emerge from beta phase. As of April 2022, Clara’s total seed funding amounted to more than $3.5 million.
Apr. 27 – Legal AI-focused firm Harvey raises $21M
Harvey announced that it has raised $21 million in funding in a Series A led by Sequoia Capital with participation from the OpenAI Startup Fund, SV Angel, and Elad Gil. The round follows a $5 million funding round in November from OpenAI LP’s startup fund. The San Francisco-based generative AI startup focuses on the legal profession, harnessing the power of OpenAI’s GPT-4 large language model AI to provide these capabilities to a growing number of law firms in an invite-only service. Harvey revealed that there are currently more than 15,000 law firms on the waitlist for its tech, with joining in February and PricewaterhouseCoopers LLP launching a legal chatbot with Harvey in March.
“At Harvey, we believe that the future of AI will not be a chatbot that compliments your workflow; it will be the platform your workflow is built on,” Harvey co-founders Gabriel Pereyra and Winston Weinberg said.
Apr. 19, 2023 – Lexion Raises $20M to Expand Generative AI-Powered Services
Lexion has raised $20 million in a Series B funding round led by Point72 Ventures. Offering “an array of AI-powered contract and business management services,” Seattle-based Lexion began incorporating generative AI last year through the AI Contract Assist plugin for Microsoft Word, which engages generative AI to help draft, negotiate, and explain contracts for people outside the legal profession. The new round brings Lexion’s total funding to date to about $45 million. “For us, AI is not just hype – it’s our past, our present, and our future. When OpenAI released davinci-003 last November, we already had a use case for Lexion,” CEO Gaurav Oberoi said. “Our goal is to help lawyers save 80% of their time spent redlining contracts and then continue to extend this efficiency boost to sales teams filling out RFPs, IT teams completing security questionnaires, and more.”
Mar 21, 2023 – LeanLaw $4M in Series A Round
LeanLaw has raised $4 million in a Series A round led by FINTOP Capital. The Boise, ID-based company provides a financial operating system for small and mid-sized law firms; its first fintech integration was with QuickBooks Online. “With cloud-based billing and invoice workflows, law firms will see invoices paid 70% faster with LeanLaw’ streamlined accounting workflows,” Jonathon Fishman, CEO of LeanLaw, said in a statement. The company will use the new funds “to become a competitive challenger to legacy legal tech and to move forward with its fintech integrations.”
Mar 13, 2023 – Nexl Raises $4M to Build Out CRM Platform for Lawyers
Nexl has raised $4 million in a financing round led by Australian-based B2B venture capital firm EVP with follow-on participation from The Legal Tech Fund, Vulpes, and Saniel Ventures. Nexl – which provides a no-data-entry CRM platform for lawyers – will use the new funds to “accelerate the development of its core product, increase acquisition efforts in major markets, and attract industry talent to build out its fast-developing ecosystem for partners and clients.” Founder Philipp Thurner said that “raising money in the toughest investment climate in recent memory is validation of [the company’s] thesis.”
Mar 3, 2023 – Henchman Raises $7M in Series A
Henchman has raised $7 million in Series A funding in a round led by a New York-based early-stage fund Adjacent VC and a Munich-based VC fund Acton Capital, with participation from including Louis Jonckheere & Pieterjan Bouten (founders Showpad), Felix Van de Maele (founder Collibra) and Bram Couvreur (Partner at U.S.-based law firm Cooley). The Belgian startup uses AI tech to “automatically centralize past clauses and definitions from any legal team’s contract database (whether law firm or corporate legal department) and deliver them intelligently in lawyers’ familiar Microsoft Word or Outlook environments” to boost firms’ contract drafting. The round brings Jorn Vanysacker, Gilles Mattelin, and Wouter Van Respaille-founded Henchman’s funding to date to $10 million. The funds will be used to further innovate and expand geographically.
Feb 9, 2023 – Bessemer Venture Partners Acquires Majority Stake in Litify
Bessemer Venture Partners has acquired a majority stake in Litify, which offers an “‘end-to-end legal operating platform’ that can be used for full-service practice management, enterprise legal management, plaintiff practice management and claims litigation management.” The parties did not disclose the terms of the investment. Litify previously raised $50 million in a Series A funding round in 2019, following from earlier rounds of $2.5 million in 2018 and $5 million in 2017. The lead investor in that Series A round, Tiger Global Management, will remain a minority investor.
Feb 8, 2023 – Macro Raises $7M in Seed Round
Jan. 11, 2023 – Apperio Raises $7M for Legal Analytics, Management Platform
Apperio has raised $7 million in a round led by Molten Ventures, with participation from Cambridge-based VC IQ Capital, Palo Alto-based VC Nextlaw Ventures, and London-based VCs Notion Capital, Volution, and Hambro Perks. The latest cash infusion brings the London-based company’s total funding to date to $19.9 million. The Nicholas d’Adhemar-led company – which touts itself as “a legal spend management software that helps in-house legal teams stay control their spend and build trust with external counsel” – will use the new funds to “further develop the company’s product for corporate counsel and to meet the growing demand for new functionality from law firms,” and to expand its operations in both the UK and the US.
Jan 4, 2023 – SingleFile Raises $3.2M for Register Agent Tech
SingleFile raised $3.2 million in a round led by existing investors Foundry and PSL Ventures, with participation from its largest law firm clients, bringing its total funding to date is $8.6 million. Seattle-based SingleFile – which “helps companies and law firms fill out reports, manage filings, maintain internal records and remain in good standing” – will use the new funds to fuel growth of its technology. “Government compliance is unavoidable and therefore recession-proof,” said CEO Aaron Finn, noting that the company’s revenue has grown by 3X in the past 18 months.
Dec. 13, 2022 – Digip Raises €3.2M to Digitize €150B Trademark Market
Digip raised €3.2 million in a seed round led by Industrifonden and Seed X with participation from various family offices and angel investors from the Stockholm startup ecosystem. Offering an “on-demand trademark registration and protection service that gives entrepreneurs an opportunity to protect and strengthen their brand names worldwide in a digital and user-friendly environment,” Stockholm-based Digip is prepping a launch of new features, including open API that will let partners integrate Digip’s techinto their workflows. The company will also expand into new markets over the next 12 months.
Digip co-founder and CEO Viktor Johansson said, “A company typically spends a 4-figure amount for a trademark search, and waits weeks for results. We have already transformed this experience for users who are reporting average savings of 80% of trademark management fees and cutting a substantial amount of their workload by using the platform and services.”
Nov. 29, 2022 – Josef Raises €5.2M in Pre-Series Round
Josef has raised $5.2 million in a Pre-Series round led by OIF Ventures, with participation from Carthona Capital, Flying Fox Ventures, Jelix Ventures and Saniel Ventures, in order to “support the business as it doubles down on its mission to transform the way legal services are delivered globally.” Established in Melbourne by lawyers Tom Dreyfus and Sam Flynn and engineer Kirill Kliavin, the Australian startup offers software that “enables legal professionals to easily build digital tools that automate their day-to-day work, from streamlining intake, to drafting contracts and providing advice.” Josef will use the new funds to expand its reach globally through several new hires in the U.S., alongside APAC, following successful launches in North America and Europe in 2021.
Nov. 23, 2022 – Goodlegal Raises €1.2M in Pre-Seed Round
Goodlegal has raised €1.2 million in a Pre-Seed round from Earlybird Digital East Fund, which led the round, Credo Ventures together with Daniel Dines, and Underline Ventures. The Bucharest-based company provides a legal infrastructure platform aimed at providing organizations with an “out-of-the-box legal operations framework to achieve legal compliance by leveraging the latest technology advancements and industry-standard content.” Founder Vasile Tiple said, “We are starting our journey to reinvent legal and help our customers to focus on their business, develop great products and become self-sufficient with Goodlegal infrastructure. Our mission is to make legal easy, accessible, and actionable.”
Mar. 4, 2022 – Legal.io Raises $11.6M in Series A
Legal.io has raised $11.6 million in a Series A round led by Tiger Global. The San Francisco, CA-based provider of an enterprise marketplace for legal talent and technology will use the funds to grow its community of legal professionals in 2022, and hire for several positions in enterprise sales, legal recruiting, and growth marketing. Led by CEO Pieter Gunst, Legal.io is building an enterprise marketplace for legal talent for temporary and permanent roles and technology.