Wise and Monzo founders back legal generative AI startup’s $10 million Series A
As the tech world continues to ruminate over anything and everything generative AI, UK legaltech Robin AI has raised a $10.5 million Series A led by Plural, the VC fund launched by Wise’s Taavet Hinrikus and Songkick’s Ian Hogarth.
It is also the first legal sector partner for Anthropic — Open AI’s direct rival and the world’s second best financed AI startup.
So how does it actually work?
Robin AI is a software-as-a-service (SaaS) startup that claims it can reduce companies’ legal fees by up to 75% by helping them with contract drafting and editing.
PwC estimates that the average Fortune 2000 company has between 20,000 and 40,000 active contracts. So it’s easy to imagine how these legal fees can add up.
Robin used its own machine learning model that it had trained on proprietary data from 4.5 million legal documents over time, combined with its 30 in-house lawyers who “monitor” the model and prompt it to suggest changes.
It is mainly aimed at corporate clients, which currently include law firm Clifford Chance and impact investor Blue Earth Capital.
The startup charges businesses an annual license to access its software platform, and then also charges per contract when there’s a Robin AI human lawyer involved for more specific needs.
The company recently integrated Anthropic’s intelligent chatbot called Claude into the software and is using it to launch a free “self-service” version of the software, which it hopes will act as a funnel for onboarding companies that will upgrade to the paid version further down the line.
It reviews over 12,000 contracts a year and, despite its UK headquarters and team, 75% of its revenue comes from the US. This will be its key market going forward, due to the size of its legal market customers.
What does Robin AI spend the money on?
- Robin AI is immediately funneling an (undisclosed) portion of its Series A funding into the partial acquisition of competitor LawGeex, to shore up its book of large corporate clients, which include UBS, PwC, eBay and Pepsi. It’s an effort that Robinson says he expects will pay off “over the next 12 to 18 months”.
- Expand research and development.
- Expanding the current team of 75 full-time staff, including lawyers and software engineers, by hiring 100 more across sales, legal and engineering over the next 12 months.
- Open an office in New York, where some of these new hires will be based.
Who has invested?
Majority, the VC firm launched by some of Europe’s most active angel investors, including Wise’s Taavet Hinrikus – who starred on the Sifted Podcast last week – and Songkick’s Ian Hogarth led the round.
Monzo Founder-an angel investor Tom Blomfield – who started as a law student – also joined as an investor in the round.
Senior executives across the legal and private equity industries from Bridgepoint, Apollo, Clifford Chance and Barings participated in the round.
Robin AI was previously awarded a grant in 2021 by Google’s Black Founders Fund, and SoftBank participated in its seed expansion last year through the first Opportunities Fund for various founders in Europe.
Sifted’s take
Legal spend management is a hot topic for startups and businesses alike, especially in the current economic climate. Companies in North America use a significantly higher part of their income in legal fees, so the focus on the US makes a lot of sense relative to the total addressable market.
That said, Robin AI isn’t the only legal contract-focused startup targeting this US market: its biggest competitor over there is Blackstone-backed Ontra. But Ontra does not have the same AI-based technology that Robin does, and is more focused on a network of freelance lawyers.
In Europe, Local Globe-backed ThoughtRiver is Robin’s biggest competitor, as it actually uses AI for contract processing – but Robinson hopes Robin AI’s much cheaper pricing model will bring it more customers of all business sizes. Atomico recently supported Swedish startup PocketLaw, which says it also uses machine learning to create contracts. A crowded market – so will Anthropic’s links be its USP?
Amy O’Brien is Sifted’s fintech reporter. She tweets from @Amy_EOBrien and writes our fintech newsletter — You can register here
