This column is a look back at the week that took place in AI. Read the previous here.
At the end of last week it was reported artificial intelligence startup Harvey was planning to raise $600 million at a valuation of $2 billion.
Of course, announcing a nine-figure fundraising valuation of over $1 billion is nothing new in the AI space – just look at some of the news from the past couple of days .
However, it’s what Harvey is doing and what such a cycle could do to his industry’s funding that has caught our attention.
Harvey’s platform makes legal documents easier to search and analyze and is one of a growing number of generative AI startups in the legal tech space that seek to relieve some of the repetitive, time-consuming and mundane tasks of tasks of lawyers.
Funding for legal tech startups is down slightly this year compared to last year, per Crunchbase data. For nearly half the year, legal tech startups raised just $356 million, compared to the $871 million raised last year in the sector by venture-backed startups.
Clearly, the Harvey round – if it comes to fruition – would completely reverse this funding trajectory, showing the growing appeal that AI appears to have in the legal sector.
Some of the biggest fundraising rounds in legal tech this year have come from other AI startups looking to gain a foothold in the industry, including:
- Based in London Robin AIa legal assistant designed to automate and accelerate contract drafting, raising a Series B worth approximately $26.7 million.
- Based in New York DraftWisea contracts and trading platform for law firms, raising a $20 million Series A round.
- Based in Toronto spell book is a legal software startup developing a generative artificial intelligence contract drafting tool for lawyers, raising a Series A worth approximately $19.6 million.
Of course, this trend of AI-related legal tech startups receiving funding actually started last year – including with Harvey himself. The San Francisco-based startup raised an $80 million Series B last December, led by Kleiner Perkins And Elad Gil which valued the company at over $700 million after cash.
Additionally, other AI startups like Darrow, LegalMation And AI Powerlaw all collected solid rounds last year.
Investor interest in AI-related legal technology, which began to emerge last year, is only growing – and the sector may be poised for its biggest surge ever.
For years, funding for legal technology has fluctuated, as the industry has been notoriously slow to adopt it. However, AI, as it has in many other sectors, appears to be slowly changing this funding dynamic.
What caught our attention and other things:
- Another sector that is seeing a lot of disruption thanks to AI is healthcare. This week, another startup received a significant tranche of cash. Based in New York Prioran AI-powered healthcare administration platform, locked in a $20 million Series A round led by AEN has reported Post-money valuation of $95 million. The company’s AI co-pilot facilitates insurance approvals and reduces care denial rates. Its initial offering is in prior authorization automation.
- Another financial services startup using AI also raised money. Based in Salt Lake City Leapwhich uses AI to automate repetitive tasks like taking notes and reviewing data from previous customer calls, raised $4.6 million in a funding round led by Sorenson Capital.
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