AI startup Legora is in talks to raise $85 million in funding at a $675 million valuation, according to five sources familiar with the deal.
General Catalyst and Iconiq are leading the deal, these people said. Existing investors Redpoint Ventures and Benchmark are also participating in the round.
Legora, General Catalyst and Iconiq have not yet responded to requests for comment.
Legora’s AI software helps lawyers draft contracts, review and analyze documents, and run checks against legal databases, automating some of the most repetitive and tedious tasks for attorneys. Its system is built on top of Microsoft’s Azure platform and combines a variety of AI models from the likes of OpenAI and Meta.
Over the last few months, Legora has signed deals with a string of big name law firms like Cleary Gottlieb, Goodwin and London-based Addleshaw Goddard. Cofounded in 2023 in Stockholm by 25-year-old CEO Max Junestrand, CTO Sigge Labor and CPO August Erseus, the 60-person company now boasts over 250 customers across more than 20 countries, according to its website.
In February, the company rebranded itself from Leya to Legora and soon after opened new offices in New York City, its first outpost outside Europe. At the time it had just $35 million in total backing. With this new raise it has about $120 million. It’s still playing catch up with OpenAI-backed rival Harvey which has raised over $500 million with its last round at a $3 billion valuation.
Before starting Legora, Junestrand worked as an analyst at European venture fund Norrsken VC. Months after OpenAI launched ChatGPT in 2022, his Swedish cofounders Labor and Erseus built a chatbot that allowed a person to ask questions about documents they uploaded into it. That became the genesis for Legora, which was part of startup accelerator Y Combinator’s Winter 2024 batch.
A flurry of AI startups are making a pitch that their tools can increase productivity and automate some tasks. Harvey AI is stacked up against British rival Robin AI, and EvenUp, which specializes in processing personal injury claims and raised a $135 million round led by Bain Capital Ventures in October, notching a valuation of over $1 billion. In 2023, Thomson Reuters acquired legal AI firm Castext for $650 million. And then there are smaller startups like Spellbook, Supio and Luminance.
Lawyers could make an ideal testing ground for AI tools given that unlike many other knowledge workers they closely track productivity with client billing often measured in six minute increments. And with many large American law firms billing clients on average around $1,000 per hour, and partners’ pay packets linked with profits, many have been quick to sign AI trials that could potentially reduce both time and costs.
Legora’s new round comes on the heels of a 2024 $25 million Series A funding round led by Redpoint Ventures along with participation from Y Combinator, Benchmark, Wayfinder Ventures and Jack Altman’s Alt Capital.
