Legaltech Products: Which Seem Catchy to the Investors?
As of the moment of me writing this note, legaltech projects managing to raise over $1 B of investments in 2018 already made a great deal of headlines. So far, 2019 looks like quite a busy year in the industry as well. Below are some investment rounds executed within this year only:
$200 M — Onit (Houston, USA). Enterprise-wide software legal management solutions which simplify business process automation and improve business productivity across all departments and industries.
$83 M — Disco (Austin, USA). E-discovery software for law firms and enterprises.
$23 M — Ironclad (San Francisco, USA). Contract management software for legal teams.
$11 M — Helpcheck (Düsseldorf, Germany) defends consumers against corporations and insurance companies.
$7,5 M — Fairwill (London, Great Britain) helps people electronically set up their wills. Discount for couples:)
$4,5 M — Evisort (Boston, USA). Contracts AI which helps companies and legal teams organize, understand, and extract data from their contracts.
If we look closely at the projects that succeeded to raise money since early 2018, it becomes obvious that most of them are not basically targeted at general individuals but at legal firms and major businesses. No surprise here. Most likely, B2B legaltech products where the second B stands for enterprises, major consulting services or lawyers look way more appealing to the investors than sales of platforms and services to startups, students and random families.
Let’s check legaltech practices that raised some serious funds (over $10 M) and their target audience.
Obvious as it is, legal consumer products are only being offered by the big-time LegalZoom (USA, online legal services for people and small business), Notarize (a remote electronic notary service, USA) and German Helpcheck.
However, startups are lucky enough to use other services apart from LegalZoom and Notarize, such as:
Checkr (USA) provides modern and compliant background checks.
Carta (USA) helps companies and investors manage their cap tables, valuations, investments, and equity plans.
Concord (USA) is a contract management platform.
Atrium (USA) is a full-service corporate law firm that uses modern technology.
Incopro (UK) is an online brand and intellectual property protection company.
Upcounsel (USA) is a virtual marketplace for legal services.
So, 13% of products developed by the above-mentioned companies are targeted at fitting legal needs of individuals, 34% focus on startups and small enterprises, while 70–87% aim at corporations and lawyers.
Should we look closely at legaltech projects that raised less than $10 M starting from early 2018 and up to now (and there is quite a number of such), we can see almost the same trend. It actually helps to foresee which products might be most juicy for the investors.
It knocks me off balance a bit as a consumer, but at the same time it serves as quite of a suspense for me as a legal professional: what new offerings and ideas are about to hit this market?
P. S. While I was compiling this note, a certain case which happened to me several months ago crossed my mind. I was in the process of registering my startup for ABA TECHSHOW conference in Chicago and happened across the following requirement: your product or service is targeted to lawyers or legal professionals, not to consumers. So there, QED.