Sandstone Raises $30m For AI-Native Inhouse Teams

Sandstone has raised $30 million in a Series A funding round led by Lightspeed Venture Partners, to support the development of AI-native legal departments – (see AL Interview with CEO, Nick Fleisher, below).

The investment follows Sandstone’s $10m Seed round in January. In the past 90 days the US-based company has increased revenue by over 40x and onboarded customers such as Wayfair, Grindr, Mercury, Cox Media, and ElevenLabs, they said.

This all sounds very positive. So, what does Sandstone do?

Sandstone brings multiple elements of the inhouse function together into a single platform, ‘connecting counterparties, stakeholders, matters, obligations, contracts, and history into one working surface’, they said.

Then, with the ‘legal context unified, teams can deploy AI across intake, triage, drafting, review, and knowledge retrieval with a complete understanding of the relationship behind the work’.

They added that Sandstone’s approach, ‘training AI on legal-specific context and integrating directly with how in-house teams actually work, positions it as a uniquely defensible platform in an underserved category’.

Or, as Fleisher says in the AL interview below ‘in-house legal has been underserved by software for too long, and it’s finally fixable’.

Guru Chahal, Partner, Lightspeed Venture Partners, commented: ‘The best vertical AI companies win because they understand the profession as deeply as the technology.

‘Sandstone has demonstrated that rare combination: a team that has lived these problems first-hand and the engineering ambition to solve them at scale. We believe Sandstone is building the defining platform for in-house legal.’

Other investors included Mantis VC, SV Angel, Operator Partners, Kearny Jackson, Daybreak Ventures, Liquidity Ventures, and others.

AL Interview with CEO Nick Fleisher :

What does this new investment mean for you on a personal level?

It means the bet is real. Lightspeed and our investors writing this check means a lot of other people now see what we see: that in-house legal has been underserved by software for too long, and that it’s finally fixable. With the state of AI today, it’s finally feasible to make sense of and auto-maintain unstructured and fragmented data, and legal teams want a single platform to support that.

So this isn’t a finish line or anything close to one. It’s fuel. It means we get to bring the legal department of the future to far more teams, far faster. That’s the part I actually care about.

How are clients responding to what you offer and how is this different to what others are offering?

Clients respond to one thing above all: for the first time, the system actually understands the relationship behind the work, not just the document in front of them.

That’s the real difference. Most of the market sits in two buckets.

CLMs are built around the contract. They’re a system of record for documents, but not for relationships. The workflow capabilities are impossible to build and maintain due to outdated tech.

Then there’s a wave of intake and “control tower” tools that route requests to the right lawyer, mostly out of Slack. Useful, but thin. They move the ticket; they don’t understand it and how to improve over time.

Sandstone is Legal Relationship Management. We connect counterparties, stakeholders, matters, obligations, contracts, and history into one working surface, so every legal decision is made with the full relationship in view, before and after signature.

Three things set that apart. We handle intake everywhere legal work actually starts: email, messaging, and the business tools teams already use, not just one channel. We build a single context layer across every legal decision, so the system knows your playbooks, precedent, and the business reasons behind them. And our workflows are agentic and self-learning—not the rigid templates of a CLM, but AI agents that run intake, triage, drafting, review, and retrieval with complete context while adapting your knowledge over time.

The legal tech market is changing very quickly now, how do you see things evolving?

The first wave of legal AI was ‘look, it can draft a clause’. That’s table stakes now as generating words became cheap. What’s becoming more valuable is context: knowing whether the words are right for your company and this relationship. The market is moving away from features and toward the layer underneath them.

Legal is becoming the connective tissue of the AI-native company. Every function is racing to deploy agents, and each one eventually hits a question of risk, precedent, or obligation, which is legal’s job. The teams that win won’t be the ones with the flashiest tool. They’ll be the ones whose legal relationships are unified, understood, and reachable by every system they run.

And it’s worth being clear about what teams are actually paying vendors for now, because it’s changed. The raw intelligence is increasingly a commodity that the frontier labs supply. What they’re paying for is everything the model and MCPs can’t give them: an opinion on how legal work should actually flow, features that evolve as fast as the problem does, and real service from people who understand the profession. Most of all, they’re paying for the infrastructure layer: the properly mapped connective tissue into Slack, email, CLMs, Salesforce, and the rest of the stack. A frontier model can reason brilliantly and still be useless if it can’t reach your systems or your context.

There’s also a cost story nobody’s telling yet. Most legal work today defaults to the most expensive path available, whether frontier models, ALSPs, or outside counsel. The future isn’t spending less or more. It’s spending better, or matching each task to the right level of intelligence. You don’t put your GC on data entry, and your software shouldn’t either.

And given all of these changes, where is Sandstone in the next few years?

We intend to be the operating layer for every legal department — the place every legal relationship lives, and the brain every other system taps when it hits a legal question or work item.

That means a few things. Sandstone becomes the single source of legal context inside a company, with institutional knowledge as a living, compounding asset instead of something that walks out the door when a lawyer leaves. It becomes reachable everywhere, so any agent or tool you run can safely draw on it. And Sandstone is the infrastructure or platform you engage to understand “what am I working on today” and “what are my agents working on, and what suggestions do they have to improve?”.

The bigger picture: in-house legal has been overlooked by software for decades and underserved as a community. We intend to fix both. The first generation of AI-native legal departments is being built right now, and we plan to be the infrastructure they’re built on.

Thanks Nick and congrats!

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You can find more about Sandstone here.

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Legal Innovators California Conference is this week on June 10 and 11 in San Francsico. 

For the first time at the California conference, we are providing complimentary tickets, which includes all sessions, breaks, lunch, and the evening networking drinks reception in the heart of the Bay Area, which in turn is the bustling centre of the global AI industry – and which is now changing the legal tech world itself.

Legal Innovators California is also the largest and most pioneering legal tech event on the West Coast of the USA – but we only hold it once per year, each June. So, if you’d like to join us, then get your skates on and claim your ticket! There’s so much happening now in legal tech and AI, this is an incredible opportunity to be right at the center of the action, with those who are shaping the future of our industry!