Ediscovery company DISCO has bagged an additional $60m in funding, valuing the company at $785m. The move follows a hard time for the litigation market in the US and globally, with DISCO laying off staff in March this year as the pandemic started to bite.
At the time of the job cuts the company said: ‘The decision to reduce our workforce was made solely to offset a potential downturn in business due to the coronavirus crisis.’
Cleary the investors think that things are on the long-term upswing again. Georgian Partners led the financing. Existing investors Bessemer Venture Partners, LiveOak Venture Partners, and The Stephens Group all participated, and new investor Breyer Capital also invested.
This latest funding brings total investment in DISCO to $195m.
DISCO Founder and Chief Executive Officer Kiwi Camara, said: ‘We are building the enterprise software system of record for the legal function. Every major company has a legal department and spends money on legal services, but there is very little software built to help legal professionals do their work.
‘We want to change that. Legal is a critical business function just like sales or marketing or finance. We believe that software can transform the legal function just as it has transformed every other business function. DISCO is positioned to build for legal the kind of horizontal platform that Salesforce built for sales.’
The funding shows once again that investors are looking past the current dip in the economy and the impact of remote working, and are playing the long game, at least with scaleable companies.
The large investment does raise questions about the job cuts and what they were for. As, presumably with all that money, the company will now be hiring and growing very rapidly….which begs the question: why sack those people at that time?
After all, such a large investment round was probably started not long after the job cuts….and must have been on the agenda for a long time.
One other question the market may now ask is: will DISCO hire back all the people it sacked just 6 months ago?
Artificial Lawyer put these questions to DISCO. A spokesperson replied: ‘Given DISCO’s high growth rate, we had aggressively hired in 2019. Like many companies, in the early days of the pandemic we were uncertain of the impact the pandemic would have on our business.
‘We took aggressive steps to ensure we could weather the disruption caused by the pandemic regardless of the duration, which resulted in a restructuring of the business. Our hiring plans are aligned to this business restructuring.’