Money for Legal Tech: Two Big Financings this Week (and One Little One)

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This week brought notable funding rounds for two legal technology companies, Proof and Spellbook, and a much-smaller seed round for a newer legal tech startup.

Proof Raises $30M Series B

Proof Technology, whose platform facilitates on-demand service of process and electronic filing, has closed a $30.4 million Series B funding round. The round was led by Long Ridge Equity Partners with participation from existing investors including Blue Heron Capital and The LegalTech Fund.

The company says it will use this new capital to accelerate revenue growth, expand electronic filing capabilities, enhance integrations with legal industry case management software, and more deeply embrace AI to create additional efficiencies for its users.

Proof provides a litigation services marketplace where law firms and government agencies can access a nationwide network of process servers, electronic court filing services, and remote notarization. More than 5,000 law firms and government agencies currently use its platform to deliver or e-file close to 20,000 documents each month, the company says.

In 2022, I interviewed Proof’s founder Eric Voogt for my LawNext podcast, where the Colorado lawyer described how he had seen the service-of-process business as antiquated and in need of a technological upgrade. He founded the company in 2016, and when we spoke in 2022, he had just raised a $7 million Series A round.

“Since our founding, we’ve been helping law firms, corporations, and government agencies more easily serve and file summons, subpoenas, complaints, and other legal documents anywhere in the country, dramatically reducing the time and hassle involved in serving and filing legal documents,” Voogt said this week in announcing this latest funding round.

Spellbook raises $20M

Spellbook, a company whose product uses GPT-4 and other generative AI models to speed contract drafting and review directly within Microsoft Word, said this week that it has raised $2o million in a Series A round. 

This is the second big raise in under a year for the company, formerly known as Rally Legal. Last May, it raised $10.9 million in a seed round led by Moxxie Ventures, with participation from Thomson Reuters VenturesInovia CapitalThe LegalTech FundBling Capital and others.

This latest round was led by Inovia and included participation from those same investors plus others.

The company says it will use the funds to scale into 30,000 law firms worldwide, while also developing new functionality: AI that mimics the style of a lawyer and that can automate a lawyer’s full end-to-end workflow, starting with a client email, and that is 10x more accurate for contract work than anything else on the market.

“This raise marks a major milestone for our team, and is indicative of the market traction we saw in 2023,” said Scott Stevenson, cofounder and CEO. “With the new capital, we’ll continue innovating within the legal AI sector, partnering with the most law firms of any generative AI that we know of –and more importantly, to continue delivering new value to our customers.”

Over the last seven months, since announcing its seed funding, Spellbook’s customer base has grown nearly 300% and it is now working with over 1,700 law firms and legal teams, the company says, and from 2022 to 2023, its revenue grew 10x.

Legalyze.ai Receives $100K Angel Investment

Legalyze.ai, a startup that promises to revolutionize how legal professionals handle case work, has received a $100,000 angel investment from the Bethesda, Md., venture capital firm Payment Ventures.

The Dallas-based startup says it uses AI to help lawyers quickly review and generate documents in litigation, enabling them to more quickly create summaries, timelines and procedural documents.

“We are thrilled to have Payment Ventures on board,” said Legalyze.ai CEO Chris Ford. “Their belief in our vision for Legalyze.ai is a powerful affirmation of our approach to leveraging AI in legal workflows. This funding will propel us forward, enhancing our platform’s features and extending our reach in the legal tech market.”

 



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