Legal AI co. Luminance, has raised $10m from existing investors Invoke Capital, Talis Capital and Slaughter and May, valuing the company at $100m.
The funds will be used to support Luminance’s recent product expansion and global growth, with the company now having four offerings, five global offices and over 70 employees since launching in 2016.
The move appears to suggest that the recent problems with Mike Lynch, the billionaire tech guru behind Luminance, and who is now facing charges in the US, have not dented existing investor support.
However, some observers have suggested that the company’s ‘burn rate’ for cash is relatively high and that its total income vs expenditure must be tight, given the rapid expansion of offices and staff. That may explain the need for the additional $10m.
In November 2017 the company closed a $10m Series A funding round that valued the company at $50m. According to Crunchbase the company has now raised a total of $23m in four rounds since 2016.
The focus on stating what the company is worth – which naturally is a subjective figure – seems to suggest that at least some of the backers are looking for a sale. After all, why keep focusing on that aspect if a sale was not the goal?
Will investors want to buy Luminance with the Lynch proceedings hanging over the company? Hard to tell. But, it’s proven itself as a legal AI company, even if smaller in total revenue than rivals such as Kira Systems.
In response to the above, CEO, Emily Foges told Artificial Lawyer: ‘The funding is because we are growing fast, so we need more people. We need to support our customers.’
As to the suggestion from some in the market that Luminance might be running out of cash, Foges was crystal clear that this was absolutely not the case.
She stressed: ‘We are not trying to sell and clearly our revenue is growing.’ Although, Foges would not comment on revenue figures for 2018.
When asked if interest from the market in acquiring Luminance would be entertained, she replied: ‘Want to buy Luminance? Join the queue.’
‘It is too early for that. There is way more that we want to do before that stage,’ she concluded.
Foges added that investors didn’t keep investing without a good reason and that they regularly turned away other funds that approached the company who wanted to invest.
Vanessa Colomar, Partner at Invoke Capital, added in a statement: ‘The company’s success over the past two years is indicative of the fundamentally different solution it is providing to law firms and in-house legal teams and we are pleased to back the business through its next stage of growth.’