German Legal AI Pioneer RFRNZ Closes Down

German legal AI pioneer, RFRNZ, which had a focus on contract analysis, has closed down and is now going through an insolvency process. The company’s CEO told Artificial Lawyer that a lack of VC funding along with the combined impact of the pandemic were the key causes.

The move is another blow to Germany’s legal tech scene, which in November last year saw fellow AI company, Ayfie, close down its German operation. While Leverton, the first legal AI and prop tech company in the country, closed its original base there after merging with US company MRI in 2019.

Co-founder and CEO of RFRNZ, Sven von Alemann, told this site that a deal with another company had been put together, but this fell through, leaving them no choice but to end activity and enter insolvency.

‘We did not get new VC funding, and then we planned and negotiated to partner/integrate with a strategic company which would have been a great fit. Unfortunately the deal was canceled at the last minute.

‘But it was also difficult for us to find enough customers who wanted to commit beyond PoCs or extensive testing in 2020. I think Covid was the last straw,’ von Alemann explained.

At its peak the company, which was based in Munich, had 14 staff, with nine team members just before they filed for insolvency.

RFRNZ had been part of a new wave of Germany-based legal tech companies. Back in 2017 the company explained to Artificial Lawyer that although the company is ‘language agnostic it does have a unique selling point: RFRNZ will be a ‘native German’ legal AI company. I.e. while others may train their natural language processing software to understand German terms after first launching in English, RFRNZ will have German language capability from day one‘.

Talking to this site von Alemann said that despite the closure he had learnt a lot from launching the startup and had a positive outlook for what would come next.

‘Once this process is done, I will most likely stay in the industry and would like to use my experience and expertise to help companies with their challenges in legal operations and legal processes. I have seen day-to-day what works and what doesn’t and how using the right technology can make legal work and processes more effective,’ he explained.

He added: ‘It was an amazing journey. Despite the unlucky end we are proud to have created a great product with an awesome team. We did make an impact in the market and built many valuable relationships. It is still a tough market, especially in Germany.

‘In my view, and somewhat surprisingly to still have to say that in 2021, it might take some more time until the market is ready to fully embrace such AI solutions here [in Germany].

‘But I remain 100% positive that this will happen and there are many aspects of legal operations and legal work that can be automated, made more effective, or deserve better processes. And I’m looking forward to contributing to this!’

Artificial Lawyer wishes von Alemann and the team the best of luck in whatever they do next.