German legal AI start-up rfrnz has bagged around €1m in funding to develop its NLP and ML-driven contract analysis platform.
The national High-Tech Gründerfond, UnternehmerTUM Initiative for Industrial Innovators and two other investors made the seven figure investment.
Artificial Lawyer first wrote about rfrnz in 2017, when the company, co-founded by Sven von Alemann, joined a market that was still in its early days in Germany. Now, things have changed and with the additional capital rfrnz should be able to scale up rapidly.
The Munich-based company said in a statement to Artificial Lawyer that the funds will be used to finance and advance the growth and further development of the product and team.
Von Alemann said: ‘The analysis of contracts is often a bottleneck in legal and purchasing processes. We want to support law firms, legal and purchasing departments in digitising and automating their work in order for them to become internal accelerators.’
The platform has many of the functions of others in the market, for example customers can identify and extract relevant information in contracts such as topics, clauses or individual data. In addition, anomalies can be detected to identify unusual or missing clauses.
The company added its platform has already been successfully implemented in DAX-30 corporations (i.e. listed on Germany’s main exchange), medium-sized companies and law firms.
‘We are convinced that the market for AI-based legal services will develop very strongly and look forward to working with the dedicated team at rfrnz,’ added Kristin Müller, Investment Manager at High-Tech Gründerfonds.
The big question is: will there be a big enough market opportunity for what are now a large number of legal AI companies? For example, even in Germany rfrnz will have to compete directly with LEVERTON, which although global now started out as a German AI company.
The short answer is yes. There are a limited number of super-giant global law firms and that battle is being intensely fought out by players such as Kira Systems, Luminance and several others. However, there are hundreds of good quality, large and medium-sized commercial firms around the world that have yet to commit to one legal AI system or another.
And, there are even more corporates globally that could leverage this type of technology on their own. This means the potential market is far larger than what we see today.
Moreover, at least for German-speaking clients, having an AI company that is homegrown may be seen as an added benefit. And, Germany remains the largest economy in the EU with a mass of significant companies and banks.
In short, there is everything to play for.