While crowdfunding is a popular means for many startups to gain investment and to help complete product development, it’s been rare for legal tech companies to seek capital in this way. Now, Brazilian legal tech platform, Juridoc, is launching a fundraising round on Latin America’s Kria crowdfunding site.
Juridoc, which Artificial Lawyer featured earlier this month, is a multi-aspect legal platform that has started with document automation and is seeking to build out a variety of additional capabilities, from contract negotiation and data analysis to an NLP-driven bot, powered by IBM Watson’s tech stack, to help guide lawyers and non-lawyers in businesses through document creation.
As mentioned in the earlier article, this is an ambitious project that will need a lot of input to come to fruition, but equally shows the ambition of the Brazilian legal tech scene, which is red hot at present and seeing dozens of new companies coming to life to serve a legal market which has over one million lawyers in a country of 207 million people, a ratio of 1:206
There are 1.34 million lawyers in the United States, with a population of 325 million people, or 1:242, by way of comparison. Moreover, Brazil remains a ‘developing economy’, at least outside the major cities, so the number is impressive.
Now, Juridoc’s founder, Maxime Troubat, is seeking to raise R$550,000 in total, which is about US$150,000, with R$300,000 coming from individuals making an investment via Kria to build out the platform for the Brazilian legal market.
Naturally, Artificial Lawyer is not recommending that you make any investment, and if you did you should of course read the site’s Terms & Conditions very carefully and all about the company, and the Brazilian legal market, before even considering doing so and also take advice from a relevant professional.
Perhaps of most interest is simply that a legal tech company is taking this approach. We have seen legal tech companies launching their own cryptocurrencies via an ICO to gain funding, such as Agrello from Estonia did last year to support its smart contract creation project. And of course, we have seen many legal tech companies self-fund, take seed money from VCs, angels and also some law firms, with a mix of founders’ own money and some early seed money from angels as one of the more popular approaches in legal tech land.
Is there a ‘best way’ to launch and fund a legal tech company? Hard to say. Just because most legal tech companies don’t go down the crowdfunding route doesn’t mean it cannot work. One aspect of this path is that it allows micro-investors, which means you get a very broad range of investors. For example, the smallest investment in Juridoc via Kria will be R$2,500 (US$690 or £500).
One challenge that crowdfunding has faced in the past is that sometimes the invested company has not been able to deliver on time what was planned. As small investors who put in their money via an intermediary it can be hard to do much about this. On a more positive side, crowdfunding allows people to take part in a product or service that excites them and to be part of a technological change in a market that they care about. In 2016, for example, around $740m was raised globally via crowdfunding platforms.
Juridoc said that one of the main objectives now is to hire key people such as a developer, an administrative assistant and sales manager and also invest in marketing. These professionals will work in the new expansion phase of the company.
The company added that Juridoc has already helped ‘hundreds of entrepreneurs to manage their legal and administrative needs in total security without any legal knowledge’. Clients save on average, up to 80% of their legal costs, they added.
Juridoc concluded that it ‘represents today a real disruption in the [Brazilian] legal market by offering online solutions which result in a new way of searching such services’.
Good luck to Juridoc and the wider Brazilian legal tech scene.
[ As mentioned, this is not financial advice, and the news story is merely for legal tech market interest. ]