Japan’s legal AI pioneer, LegalForce – which provides NLP doc analysis and contract management – has received $101m in a new fundraise joined by the local SoftBank Vision Fund, Goldman Sachs and Sequoia Capital.
Artificial Lawyer was one of the first legal tech sites outside of Japan to cover the homegrown startup back in 2018 and interviewed the founders in detail in 2020 (see article).
Aside from being a very prestigious group of investors, which also includes Mizuho Capital, Mitsubishi UFJ Capital, and the World Innovation Fund, it’s yet another investment into legal tech for the giant SoftBank, which has also invested in ContractPodAi, Marqvision, RobinAi and Icertis. It’s worth noting that with the exception of Marqvision, all of these connect to contracts.
With regard to LegalForce, this is what the company now offers:
- Contract examination platform – ‘LegalForce automatically collates the checklist for each contract type with the contract by using technology such as natural language processing, and instantly detects omissions that may be a risk.’
- AI contract management system, LegalForce cabinet – ‘Simply upload the contract to the ‘LegalForce Cabinet’ and AI will automatically read the necessary information such as the title, contract party name, contract deadline, etc. and create a ledger. You can instantly search for the contracts and terms you need. In addition, renewal management is performed automatically to prevent contract termination and unnecessary contract continuation due to omission of renewal.’
SoftBank Investment Advisers Managing Partner, Kentaro Matsui, said: ‘The need for legal [tech] solutions is increasing against the backdrop of growing needs for operational efficiency and a shortage of human resources in corporate legal affairs.
‘Under such circumstances, LegalForce uses AI and machine learning as its strengths to provide solutions to a wide range of corporate legal affairs and improve operational efficiency. We are very pleased to be able to support the growth of [the founders] Nozomu Tsunoda, Masataka Ogasawara, and LegalForce, who are leading the transformation of corporate legal affairs by utilizing AI in this way.’
Is this a big deal? Yes, in several ways.
First, that is an impressive group of investors for a company not many people have heard of – yet; second, SoftBank has again put money into legal tech – showing that the earlier investments were not just chance, but are now in fact something of a trend for them; and third, Japan has had a fairly small legal tech scene up until now, so to see a home-grown legal tech pioneer – and one focused on NLP – gain so much growth capital is a really strong sign that things may be changing.
It would be great if that is the case, as Japan is the third largest economy on the planet and there is certainly interest in driving change in certain parts of the legal sector. Artificial Lawyer went to Japan twice before the pandemic and there was a small, but nascent legal tech scene taking shape. This large funding of a homegrown legal tech company may act as a catalyst for other startups to emerge. We shall see.
(P.S. Maurice Rabb – maybe it’s time for another ‘SOAR’ hackathon in Tokyo! – See story.)