NLP-driven contract review pioneer, LawGeex, has announced a new $20m round of funding, led by Corner Ventures, a Palo Alto-based VC fund, in further proof that where investors see long-term growth prospects they are more than happy to still open their wallets – even during the current crisis. The move follows the recent $10m funding round for spend management scale-up Bodhala.
The investment also saw participation from existing backers Aleph, lool Ventures and former Thomson Reuters CEO, Tom Glocer, plus the La Maison fund.
The company has now bagged $45m in funding in total. It started in 2014 in Israel, and was one of the first wave of legal tech startups, (now very much a scale-up), to launch with the use of NLP/machine learning software to read, analyse and help improve contracts. In their case at the review/negotiation phase, rather than for mass doc analysis exercises.
The continued investor support makes a lot of sense, as it would be a bit bizarre to help fund the growth of a successful company such as LawGeex for several years, watch it establish itself and see how it has added customers, and then just say: ‘Sorry, the next few months look a bit tough, so we’re going to let you run out of road. Goodbye.’
The investment here and also for Bodhala underlines that at least the investors involved in these deals are looking long-term and have not been put off by the downturn. Maybe the simplest way of putting this is that where investors still really believe in your offering and expect broad market uptake, regardless of a short-term demand impact, then crisis or not, investment is coming through.
As Marvin Tien, Managing Director at Corner Ventures, explained: ‘We saw in LawGeex a rare opportunity to invest in a company with an exceptional customer roster at the cusp of stellar growth.
‘LawGeex is seeing high demand for its solution and even further acceleration due to the flexibility, cost efficiencies, and safety-net afforded by digital automation during this challenging time.’
And that bit about stellar growth is certainly interesting. Use of NLP to help people review contracts has seen a surge in the last couple of years, with several other companies joining the game, and perhaps now this tech has finally reached a tipping point where it will become mainstream and see rapid roll-out across the global market? Here’s hoping.
Artificial Lawyer also asked Noory Bechor (pictured above), co-founder and CEO of LawGeex what this all meant to him and the team. Plus Bechor kindly gave some advice to others in the market.
– What does this funding mean to the team? How significant is it?
This funding is critical as it puts fuel in our tank for continued support for the growth and demand for our product we’re experiencing.
– The market for legal tech has changed a lot since LG started, where is it now and how are clients different?
In the early days Legal Tech was focused on foundational systems, mainly to improve document management and workflow. Now with Legal AI maturing, tech can tackle some of the actual “lawyering” work, and contract redlining is the perfect target.
Contracts are the lifeblood of any enterprise. Accelerating turnaround time and improving consistency and accuracy means companies can do more with less, while mitigating risk and future-proofing contracts. We’ve also heard that companies are looking for solutions (not just legal tech but ALL tech) that can be deployed quickly and show time-to-value within the current business cycle.
– What advice would you give to investors in the current climate?
Every situation causes some companies to thrive and some to struggle. Every customer wants a solution that can help them (a) increase revenue; (b) reduce cost; and/or (c) reduce risk. These requirements are reinforced during the current climate so the key is to ideally invest in technologies that, like LawGeex, can do all three.
And – what advice would you give to other legal tech companies?
If you think you will need to do fundraising within the next 12 months, be prepared for very tough questions from investors about how you will stay relevant during the pandemic and economic downturn.