H4 has just announced that it has received so far an investment of approximately $27 million in total from a consortium including J.P. Morgan, Goldman Sachs, Barclays and global law firm Linklaters.
The investment has been announced today as previously the company wanted to keep ‘a low profile’. They explained to Artificial Lawyer that the $27m total did not all arrive in one go, and that the figure represents several years of investment from different parties – but which has today been finally revealed. Linklaters’ financial input came back in 2018 – but everything has remained secret until now. No other law firms have invested.
H4 is a digital platform used for the creation and analysis of documents. H4 is headquartered in London with approximately 120 employees.
In capital markets, the technology has already been used successfully on transactions involving four of the world’s leading banks and fourteen of the world’s leading law firms to raise billions of dollars in the US and European high yield bond markets, the company said.
Joe Seifert, CEO & Co-founder of H4 said: ‘The H4 team are solving the pain of using decades old technology for the contracts that lie at the heart of the financial and legal industries. We just can’t accept that such important industries are still reliant on outdated tools when technology can unlock so much more, particularly during this time of remote work.’
Paul Lewis, Global Head of Finance at Linklaters, added: ‘We are excited to have entered into a strategic partnership with H4. The digital platform is revolutionising the way we use legal documents in our capital markets practice. Our clients are already receiving value from the technology in the production of prospectuses and we are exploring where else we can extend its use so that more clients can benefit from this new and exciting technology.’
So, that’s a lot of money for a company that many people in the legal tech sector may not have heard of before.
H4 started in 2015 and has been mostly focused on the financial services sector and especially the very top end of it, e.g. high yield bonds.
But, what does it do? Overall what it is offering is not a radical departure from what is there in the market already – but clearly their specialisation and also their ability to connect multiple capabilities together has got the attention of some very important clients.
As you can see, it offers the ability to use a digital library, create documents in a digital space that makes collaboration and negotiation easier, then it lets you capture data at the point of creation – which is a vital point – and that in turn makes analytics a lot easier.
In some ways you could see this as doing what Nakhoda was doing with derivatives, and the fact that Linklaters has invested in H4 is certainly interesting.
The point about capturing data at the point of creation is also important. There has been much debate in some circles about the structured vs unstructured data challenge.
I.e. if you have a system where contract data is immediately captured and kept in an accessible system, you can remove a lot of the need for after the fact NLP analysis. It also means the data you have captured can be 100% accurate, as it’s from the birth of the document, not a second run-through.
All in all, a fascinating move and the fact that Linklaters has invested – we don’t know how much – is significant.
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