ContractPodAi, the AI-powered contract lifecycle management company (CLM), has today announced a $55 million Series B investment round led by Insight Partners with participation from the company’s Series A backer, Eagle Proprietary Investments. This is one of the largest ever investments in a legal AI company.
The news comes as another CLM company, Icertis, has today announced a $115 million Series E funding round. This gives the company a valuation of over $1bn – the first in its segment to do so, the company added. And, if that’s correct then technically this also means that Icertis could be a legal tech unicorn – i.e. a privately held tech company valued at more than $1 billion – although as it started back in 2009 maybe it could not be classed as a startup any longer, and hence could not be classed as a unicorn?
(See end of article for more on Icertis.)
This $55m investment in ContractPodAI also represents Europe’s largest legal tech Series B fundraise, said the company.
In comparison, Kira Systems in September last year bagged $50m in funding. In June 2018, Seal Software bagged $30m, and then had an additional $15m investment from DocuSign in March this year. Eigen also bagged $17.5m in 2018.
This suggests that this truly is one of the largest ever investments in a legal AI company. However, ContractPodAi is a little different from some others in the market as it takes a contract lifecycle approach, rather than a purely transaction-driven strategy.
The investment also clearly underlines the importance of legal AI/review tech for investors in the market, who see now a willingness from law firms and corporates to leverage this technology at scale.
Founded in 2012, ContractPodAi now serves customers across every continent, with offices in London, New York, San Francisco, Glasgow, and Mumbai. Its customers include large scale global corporations across all industries.
The new investment will allow ContractPodAi to significantly scale-up its product development, sales, and customer success teams globally. This will help meet the growing demand for its AI-powered contract management platform within global corporations, the company said.
Sarvarth Misra, co-founder and CEO of ContractPodAi, said in a statement: ‘This is a truly exciting time for the legal technology sector – we are on the cusp of the legal sector’s very own industrial revolution.’
In addition, in an interview today with Artificial Lawyer, Misra said: ‘We’ve been a capital efficient company and we wanted to build a client base before we took major funding. Finding the right investment partners has also been critical.’
He added that the previous Series A round last year was below $5m, indicating the surge in interest from investors in a short space of time.
‘We have not even scratched the surface in terms of the contract management market,’ he added, and explained that ContractPodAi’s approach is to offer in-house legal teams a complete package that covered contract assembly, contract management, a repository, and AI search/review, all as part of one platform.
He also noted that the view of in-house lawyers had changed in recent years and that they were much more interested in engaging with the use of legal technology than before, and this was part of the reason for the growth of the sector now.
‘We have been at the right place and right time,’ he concluded. ‘GCs want to talk about this now. It’s dynamic.’
Jeff Lieberman, Managing Director at Insight Partners, commented: ‘We are hugely impressed by ContractPodAi’s phenomenal and capital efficient growth and, most importantly, by the passionate testimonies their customers share about the game-changing impact of the ContractPodAi platform.’
‘This momentum speaks to a real and unmet market need for a truly horizontal, end-to-end CLM ecosystem in driving digital transformation efforts across legal ops. With this investment in ContractPodAi, we are excited to partner with a team backed by a clear vision and strong leadership that has demonstrated a unique ability to build products that both legal and business users love,’ he added.
Icertis Investment (cont.)
Icertis said that the CLM market is massive and growing rapidly, which MGI Research estimates the total addressable market (TAM) at over $20 billion, with SaaS CLM growing at a 31% compound annual growth rate.
Samir Bodas, CEO and Co-founder of Icertis, said of the huge investment: ‘Companies must re-imagine every business process to compete in today’s hyper-competitive global markets. Nothing is more foundational than contract management as every dollar in and every dollar out of a company is governed by a contract.‘
P.S. re. unicorns, Artificial Lawyer asked Investec’s legal tech investment expert, Junya Iwamoto, who noted that while Icertis may be the first in the CLM segment, the first legal tech unicorn in general was LegalZoom, the SME and consumer legal platform, after its $500m funding last year.