As the tech world continues to fawn over anything and everything generative AI, UK legaltech Robin AI has raised a $10.5m Series A led by Plural, the VC fund launched by Wise’s Taavet Hinrikus and Songkick’s Ian Hogarth.
It's also the first legal sector partner for Anthropic — Open AI’s direct rival and the world’s second best-funded AI startup.
So how exactly does it work?
Robin AI is a software-as-a-service (SaaS) startup that claims it can reduce companies’ legal fees by up to 75% by assisting them with contract drafting and editing.
PwC estimates that the average Fortune 2000 company has between 20k and 40k active contracts. So it’s easy to imagine how those legal fees can add up.
Robin used its own machine learning model that it had trained on proprietary data from 4.5m legal documents over time, combined with its 30 in-house lawyers that "supervise" the model and encourage it to suggest amends.
It’s mainly targeting enterprise customers, which currently include law firm Clifford Chance and impact investor Blue Earth Capital.
The startup charges businesses an annual licence for access to its software platform, then also charges on a per contract basis when there’s a Robin AI human lawyer involved for more specific needs.
The company has recently has integrated Anthropic’s intelligent chatbot called Claude into its software and using it to launch a free "self-serve" version of its software, which it hopes will act as a funnel to onboard companies that will upgrade to the paid version further down the line.
It reviews over 12k contracts a year, and despite its UK HQ and team, 75% of its revenue comes from the US. This will be its key market going forward, owing to the sheer size of its legal market customers.
What’s Robin AI spending the money on?
- Robin AI is immediately funnelling an (undisclosed) portion of its Series A funding into the partial acquisition of competitor LawGeex, in order to acquire its book of big enterprise customers, which include UBS, PwC, eBay and Pepsi. It’s a bet that Robinson says he expects will pay itself back “in the next 12 to 18 months”.
- Expanding research and development.
- Expanding its current team of 75 full-time employees, including legal professionals and software engineers, by hiring 100 more across sales, legal, and engineering in the next 12 months.
- Opening an office in New York, where some of these new hires will be based.
Plural, 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-turned-angel investor Tom Blomfield — who started out as a law student — also followed on 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 extension last year through its inaugural Opportunities Fund for diverse founders in Europe.
Legal spend management is a hot topic for startups and enterprises alike, especially in the current economic climate. Companies in North America spend a significantly higher chunk of their revenue on legal fees, so its focus on the US makes a lot of sense in terms of 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 doesn’t boast the same AI-based tech 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 contracts processing — but Robinson hopes that Robin AI’s much cheaper pricing model will win it more clients of all company sizes. Atomico recently backed Swedish startup PocketLaw, which says it uses machine learning for contract creation, too. A crowded market — so will the links to Anthropic be its USP?