Newton: Confidence in the future
Two leading names in the world of legal technology, Clio and Harvey, announced huge fund-raises this week, valuing them at $3bn and $1.5bn respectively.
They show how investors will flock to lawtech for attractive opportunities.
Clio is the longer established business and raised $900m in a Series F investment round led by New Enterprise Associates (NEA). New investors included Goldman Sachs Asset Management.
Describing itself as “the operating system for law firms”, Clio said it would use the money to “expand its multi-product platform, including further investments in its burgeoning AI portfolio and integrated legal payments”.
It would also look to accelerate its “rapid market expansion upmarket and internationally” – Clio is already well established in the UK for small and mid-sized law firms.
“This historic raise was heavily oversubscribed, further demonstrating the overwhelming demand and confidence in Clio’s future,” said chief executive and founder Jack Newton.
“The Clio operating system is the undisputed platform of the legal technology sector, engineered to not only meet but anticipate future industry demands. We are pioneering this future for our customers, driven by our mission to transform the legal experience for all.”
Tony Florence, co-chief executive at NEA, has joined Clio’s board. “Clio embodies everything NEA looks for in a growth-stage investment: an exceptional, purpose-driven team, market and product leadership, and stellar business physics,” he explained.
“Clio is mission critical to law firms, and the company’s best-in-class retention and NPS are testaments to the team’s ability to continuously innovate, deliver immense value, and meet the dynamic needs of the legal sector.”
Clio raised its Series E funding in April 2021, a $110m growth equity round. It has more than 1,100 employees located across the world.
Meanwhile, legal AI company Harvey – has raised $100m in its Series C round, led by Google Ventures. Other investors include ChatGPT creator OpenAI.
It is only two years old but has already signed up many major law firms around the world, most recently City firm Ashurst, which is rolling it out globally for al 4,000 staff in 23 offices.
The firm undertook one of the most extensive global trial and pilot of Harvey, involving over 525 users, drawn from across 23 offices worldwide, running over 4,000 queries in the pilot phase.
This helped inform the report Ashurst published last month on the use of AI in the legal market, which said the greatest initial value for the technology in a law firm context was in helping lawyers to create first drafts quicker and more efficiently.
In a joint statement, co-founders Gabriel Pereyra and Winston Weinberg, president and chief executive respectively, said: “We will use this new capital to invest in the engineering, data and domain expertise that are fundamental to building AI-native systems that facilitate the most complex knowledge work.
“Over the next 12 months, we will continue to collect and curate the data needed to build and train domain-specific models while growing our team by headcount and location to serve our clients where they are – globally.
“We will also deepen our partnerships with both cloud and model providers to integrate additional models into Harvey and broaden our training collaborations to continue improving model efficacy.”
Harvey raises $80m in its Series B found last December and at the time was valued at $715m.
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