Icertis Buys Contract AI Startup Dioptra

Dioptra, a legal AI startup focused on contracts, which gained support from Wilson Sonsini, has been bought by CLM company Icertis. Dioptra was already working as a ‘partner’ with the major legal tech business.

Although Dioptra gained some headlines for its contract AI review capabilities following Wilson Sonsini’s vocal support – which praised its accuracy – the company mostly ‘flew below the radar’. Although it did also announce a partnership with the AAA arbitration body earlier this year.

For its part, Icertis previously has done partnership deals with other contract AI companies, such as Evisort – which was sold to Workday, then it did a deal with Harvey, and then as noted with Dioptra.

It has always felt as if Icertis would buy something in the AI doc analysis field, given that this was perhaps the one area in their CLM platform where they most could benefit. Clearly Harvey was not on offer, and Evisort was already spoken for.

So, what will this all mean?

Icertis said that ‘this marks the next milestone in the company’s long-term AI strategy following the launch of Icertis Vera [its own AI capability], and signals an inflection point in CLM innovation’.

Dioptra will be used to ‘build on the Icertis platform’s capabilities….with pre-signature agents that automate playbook creation based on existing contracts and handle first line review on every new agreement’.

Interestingly they state that this deal brings them closer to offering ‘fully autonomous contracting’ – a loaded term that brings with it the idea of different parties negotiating contracts with no lawyers present – something of a controversial Holy Grail.

In this case they explained a more modest goal, that they wanted to get to a point ‘where every agreement performs as intended and legal talent is deployed to its highest and best use’.

In summary, what they are offering is:

• ‘Automated playbook creation based on existing contracts to speed time to value, reinforce negotiation best-practices, and maximize outcomes with fully custom, AI-ready playbooks.  
• Agent-powered risk review that instantly pinpoints noncompliance with governance standards and generates a streamlined issues list to minimize liability.
• Interactive surgical redlines that align precisely with bespoke playbooks to drive greater efficiency in contract reviews and alleviate legal workloads.
• One-click clause insertion via an integrated clause library to expedite contract drafting and pre-signature processes.’

Anand Subbaraman, CEO, Icertis, commented: ‘Dioptra’s legal-centric tools will be an added catalyst to adoption of our platform as we continue to define the future of contracting with breakthrough AI.’

Farah Gasmi, Co-founder of Dioptra, concluded: ‘Becoming part of Icertis was a natural next step after Dioptra’s success as a Y Combinator startup and the early results from our partnership. It was clear from day one that we have a shared mindset around the opportunity to transform contracts into strategic business assets, and our team is excited to help drive this next chapter in Icertis’ journey as an AI company.’

Is this a big deal? Well, ever since Icertis partnered with Evisort it felt like the writing was on the wall in terms of eventually buying a contract AI company. The question was really: who would the huge CLM company – with dozens of major companies as clients – choose to buy? And who wanted to be bought?

In this case, Dioptra is a solid choice, and they’ve bought it before it grew in revenue to the point that it would have been ‘expensive’ – given current multiples. And clearly Dioptra’s founders and investors felt like this was a very good opportunity to sell.

Will this change the CLM world? Not in itself. But, it will give Icertis a very useful AI boost. The engineering talent in Dioptra will also be a valuable addition.

But, more broadly, many CLM providers and narrow contract AI companies have also already charged ahead with genAI and this move ultimately keeps Icertis in the battle, rather than giving it the power to deliver a knock-out blow to its rivals.