When Kira Unger and Olga Beck-Friis chose each other as "buddies" when they joined a new school aged seven, it’s safe to say they probably weren’t dreaming of founding a SaaS startup together.
Fast forward a couple of decades and they’ve just closed an $11m Series A for PocketLaw. The contract creation and management software helps SMEs and startups work through legal contracts, without having to hire a lawyer — something many can’t afford. It can also be used to ease the burden on in-house legal teams.
“For a lot of these companies, it can be really hard to keep up with the increasing complexity in the regulatory landscape — but we constantly update our pockets so that they’re compliant in whatever jurisdiction you’re based in,” Unger says.
The startup was born out of her woes as a mergers and acquisitions lawyer going through the repetitive work of contract writing.
The fresh capital injection brings the company’s total amount raised to €14m. It’s Atomico’s fourth investment in Sweden, after Klarna, Truecaller and Mapillary.
Legaltech has long been of interest for VCs investing in SaaS, given the opportunity to automate the repetitive and tedious tasks that come with law work. Other startups are working on simplifying contract work too: Juro raised a $5m Series A in 2020 for contract automation, led by Union Square Ventures, while Valencia’s Bounsel raised €325k last year to apply AI to contract management.
What does PocketLaw do?
Although some digital legal tools did exist before they founded PocketLaw, Unger explains, they focused on very narrow solutions like online templates, or provided contract information, contract management systems, and then marketplaces for lawyers. In other words, SMEs had to use multiple tools plus a law firm.
“So what we’ve done is we’ve just picked the best bits out of all these solutions and bundled it together to create a pocket,” Unger says. “For a lot of these companies, it can be really hard to keep up with the increasing complexity in the regulatory landscape — but we constantly update our pockets so that they’re compliant in whatever jurisdiction you’re based in.”
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Its customers are split 50/50 between startups and SMEs — from tech firms like Voi, Kry, Juni and Estrid to consumer SMEs like Punchy Drinks to global enterprises like Babybjorn and Schibsted.
PocketLaw has a team of eight qualified lawyers who each focus on a different area of contract law and create the base product options. It then uses machine learning (ML) to automate the contract templates and provide guidance on how to complete contracts in different use cases.
Its ML tool then stores historical data anonymously so it can constantly update its benchmarking and suggestions for new companies.
PocketLaw uses a subscription-based model where the price is determined by what templates a company needs access to. There’s a range of add-on premium features, from choosing a couple of templates to automating for contracts they draw up often to a legal support function where a company can get bespoke legal advice.
“That’s our secret sauce, really,” Unger says. “Because research shows that one of the reasons people might be prepared to use a tech solution for law is because they also want to feel that there's a human behind it.”
Plans for global expansion
Founded in Sweden, where it launched in 2020, PocketLaw opened an office in London in September last year, which it now considers its “co-HQ”.
It’s had a rapid year of growth, increasing revenue by 10x in the last year, and already a quarter of its customers are based in the UK.
The company plans to funnel a lot of the fresh capital into doubling its headcount to 90 over the next twelve months, by scaling up in the UK and also opening an office in Berlin to launch in Germany by the end of the year.
Alongside Atomico, a roster of prominent founders and operators who invested in the round, including Personio cofounder Hanno Renner and COO Jonas Rieke, Pitch founder Christian Reber, Pleo cofounder Jeppe Rindom, Gloria Baeuerlein and the dbt Labs board member and former Gainsight COO Allison Pickens.
Amy O’Brien is Sifted’s fintech reporter. She coauthors Sifted’s fintech newsletter and tweets from @Amy_EOBrien