Yesterday, this site shared the news that Harvey has raised $300m at a $3 billion valuation. REV, the investment arm of RELX – the parent of legal tech-focused LexisNexis – was also an investor in this rival company. But why? Here is what LexisNexis says.
First, some context, LexisNexis and the wider RELX business have invested millions of dollars into the company’s new legal AI capabilities. It has bought startups such as Henchman to help with this. And it has launched a range of new genAI-backed products that are either wholly new, or take existing products to a new level.
It’s also locked in a fierce battle with long-standing rival Thomson Reuters, which is also rolling out a range of genAI products for lawyers, and has also invested a lot – including buying Casetext.
In this environment, one would not normally expect one’s boss and overall owner, i.e. in LexisNexis’ case, RELX, to invest in a direct competitor via its REV arm. Harvey is not a legal publishing giant, but its range of AI tools for drafting, contract review, and search, are in direct competition with similar tools now sold by LexisNexis.
Understandably, Artificial Lawyer asked the company what this was all about. Here is their reply.
‘REV, the venture capital arm of RELX which owns LexisNexis Legal & Professional, was introduced to the Harvey team by LexisNexis and worked in coordination with LexisNexis in its investment in Harvey’s Series D financing.
As a core part of our customer-centric innovation, LexisNexis continuously invests in leading AI tools and technologies to enhance customer productivity, deliver next-level legal work, and to help customers drive even more value for their organizations.
REV’s investment in Harvey does not impact product development plans for LexisNexis.
Lexis+ AI is among the fastest-growing solution ever launched by the company and our focus remains on expanding use cases supported by our recently launched Protégé personalized AI assistant.
REV’s investment in Harvey does not include any cross-selling of Harvey or LexisNexis solutions. LexisNexis is collaborating with world-leading tech companies as well as emerging AI start-ups to deliver the best AI solutions for our customers.’
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So, there you go. RELX – the ultimate owner of Lexis and the REV investment fund – may end up hugely profiting from investing in Harvey, e.g. if it did an IPO, but says it won’t use this equity position it now has to cross-sell Harvey to its customers. Life will go on as usual in terms of product development at Lexis as well, they say.
But…..what still makes this site wonder out loud is the bit in the statement that mentions: ‘As a core part of our customer-centric innovation, LexisNexis continuously invests in leading AI tools and technologies to enhance customer productivity’.
And then also: ‘LexisNexis is collaborating with world-leading tech companies as well as emerging AI start-ups to deliver the best AI solutions for our customers’.
I.e. this potentially may help our customers at some point, or at least that is what it seems to say to this site.
If Harvey and its tech will never be incorporated into LexisNexis, and RELX has no intention of driving customers to this other company now, or in the future, then what has this investment got to do with LexisNexis’ customers? I.e. if this is just an investment arm splashing some cash in the hope of a profit one day, how does this then track back into helping Lexis ‘customers’, which the statement alludes to?
So, there you go. Thanks to LexisNexis for the response, but it has to be said the overall intentions here are not crystal clear.
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Note: yesterday’s Harvey news + some AL Analysis is here.
P.S. if you’d like to know more about REV, the investment arm of RELX, then see here:
‘Who we are
REV is a global venture capital partnership. We are backed by one of the world’s largest content, technology and analytics companies, RELX Group.
Our mission is to help build companies that can transform their markets through the application of data, technology and analytics. Since 2000 we have invested over $250m in Big Data, Digital Health, Internet and Enterprise Technology companies. We have been early investors in disruptive category leaders like Recorded Future, Palantir, Healthline, Babbel and Netli. We are a global investor active in all the major western venture capital hubs – San Francisco, New York, Boston, Los Angeles, Seattle, London, Berlin and Tel Aviv. Our largest portfolio cluster is in California.
What we look for
We typically invest at an early/mid stage, lead rounds and take active board seats.
However, we will also invest at a much later stage and take follower/observer positions for the right opportunity. We make initial investments of between $1-$10m. We back talented, ambitious entrepreneurs and management teams who have the drive to disrupt markets and build category leaders.’
I.e. they like to be an ‘active investor’, helping that business to grow and develop.