Legaltech startup Wordsmith AI has raised a $25m Series A led by Index Ventures, the latest in a slew of big money raises for companies helping to automate the profession.
Over the past 18 months, VCs have flocked to companies building AI tools for the legal sector, banking on the tech’s promise of huge savings for corporates and law firms.
In the first half of 2025 alone, Sweden’s Legora raised $80m from Benchmark and General Catalyst, the UK’s Luminance picked up $75m and Germany’s Noxtua €80m.
Founded in 2023, Wordsmith is building AI agents for corporate legal teams that can support with contracts reviews, vendor analysis and HR document drafting. The startup’s tools can embed directly into Slack, Word and email.
“There’s a massive opportunity for startups in the legaltech space,” says CEO and cofounder Ross McNairn. “There’s clearly going to be multiple billion-dollar companies built.”
Edinburgh-based Wordsmith previously raised a $5m seed round from Index, General Catalyst and Felix Capital, and is looking to open offices in both London and New York later this year.
‘Eye-watering opportunity’
The round is the biggest of a trio of bets Index has made in the AI legaltech space in the past month. It also led a £3m seed round into IP law platform Ankar and participated in a €10m round for compliance startup Duna.
The firm is one of several big name VCs to back a horse in the race to win out in the AI legaltech space, as the market becomes ever more crowded with well-funded startups.
Google Ventures backed UK-based duo Lawhive, which raised $40m in December, and Genie AI, which picked up $18m in October. Balderton Capital and Episode 1 also invested in Lawhive, Notion Capital led a €15m Series A in Belgium’s LegalFly and Schroders Capital put money behind Luminance — both last year.
“Competition is the very best signal that we should move into space,” says McNairn. “Competition tells you there is an eye-watering opportunity.”
But that also means there’ll be a lot of legaltechs struggling for funding as they begin to look to scale, he adds.
“There’s been a massive amount of funding at seed stage, but very few teams are building proper, repeatable, scalable production systems,” McNairn tells Sifted. “There will be a real drop off at Series A, and you’ll see a lot of slow death, acqui-hires and early customer bleed."
Wordsmith is targeting enterprises with in-house legal teams of between 2-25 people — though it does have customers with larger legal departments. Single seats for Wordsmith’s platform can be bought for £350 a month.
Wordsmith isn’t disclosing its revenue figures, but says it has between 300-400 customers, including the likes of Trustpilot, Remote.com, Deliveroo, Multiverse and Docplanner.
The US — the world’s biggest legal market — is Wordsmith’s fastest growing region by revenue, generating around 30% of total turnover. The UK makes up around 50%, with the remaining 20% spread across the globe.
