⚖️ Legal Bias - Asymmetrix Newsletter #54
Huge sums are being invested in legal AI - what happens next?
After large funding rounds last week for Harvey and Eudia, we look at what is driving growth in the legal AI space.
We report the unexpected news that Kpler has “failed to consummate the closing” of the purchase of Spire Global’s maritime business.
Lots of M&A this week, including EasyPark Group buying Parkopedia and CoStar acquiring Ag-Analytics. And we belatedly report Facts Global Energy’s merger with NexantECA, backed by TA Associates. And 14 funding rounds!
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Does AI bill by the hour?
An astonishing amount of money is being invested in legal AI businesses.
Last week saw two large rounds announced by Eudia ($105m in Series A funding led by General Catalyst) and, of course, Harvey ($300m in Series D funding at $3bn valuation led by Sequoia).
It’s clear that there’s a race going on to fund legal AI businesses and beat the competition to the opportunity. Last month, Andreessen Horowitz, Lightspeed Venture Partners and Menlo Ventures invested $47m in Eve, and Spellbook raised $20m.
Why it matters
What is the opportunity?
To take a cut of the $400bn spent annually on the legal profession in the US alone.
Although some legal work is high-value, creative and hard to perform, the vast majority is painstaking, repetitive tasks - endless filings, document drafting, and case updates. This is ideal fodder for AI.
For all the fear about AI taking people’s jobs, this is not enjoyable work. No junior lawyer entered the profession to sit in the office redacting documents at 2am. The promise of AI is to change the roles of juniors at law firms from data gatherer to data checker, and maybe even free them up to do some of the creative work.
AI focused on specific use cases in narrow niches can be extremely powerful. With highly structured training data sets and models created for specific purposes it’s possible to reduce the levels of hallucination witnessed in general AI. We’ve even seen some legal AI providers claiming to have a product with “no hallucinations”.
And law firms are clearly buying in - they are loosening up the purse strings and spending money on AI products.
Harvey CEO Winston Weinberg told Fortune that the business “has surpassed $50m in ARR and estimated it would surpass $100m ARR in about eight months. In 2024, the company said it expanded from 40 customers to 235 customers in 42 countries, including the majority of top 10 U.S. law firms.”
Thomson Reuters, the largest Legal Data & Analytics player, are deeply focused on their AI strategy, and are continuing to see revenue growth as they deploy capital on AI acquisitions such as their purchase of Materia in October last year, and product development such as CoCounsel. And Thomson Reuters Ventures is helping their parent company to place chips on the table - they invested in Spellbook’s round last month.
What happens next?
The big question is whether any of the new players will establish themselves as permanent fixtures, or whether they will be hoovered up by the established big three: Thomson Reuters, RELX and Wolters Kluwer.
In order to truly challenge these providers, and not be gobbled up, it might make sense to combine a business like Harvey with a mid-sized player like Aderant (owned by Roper Technologies) in order to get to scale quickly.
Having said this, Harvey’s $3bn valuation makes it hard for a traditional player to justify an acquisition - investors would need to be persuaded that the business would rapidly add revenues in order to justify a greater than 30x revenue multiple. Perhaps this price tag will enable Harvey to reach escape velocity and grow into an independent player in its own right, in the same way as Alphasense appears to have done in the Financial Data & Analytics market.
M&A and Fundraising
Deal chatter
⚓ Kpler “fail[s] to consummate the closing” of the purchase of Spire Global’s maritime business
Kpler is a Brussels, Belgium-based platform for global trade intelligence, backed by Five Arrows and Insight Partners.
Spire is a NYSE-listed, Vienna, VA, USA-based provider of space-based data, analytics and space services.
The Company believes all conditions to closing contained in the Purchase Agreement have been satisfied or could be satisfied. Notwithstanding the Company’s notice to Buyer to that effect, Buyer has failed to consummate the closing. Buyer has cited various reasons for declining to close, which the Company has rejected.
There is currently no governmental order in effect prohibiting closing and, in the Purchase Agreement, Buyer agreed to “use best efforts, and to take any and all actions necessary, to eliminate each and every impediment that is asserted” by relevant government entities so as to enable the parties to consummate the Transactions promptly. The Company believes that Buyer’s failure to close is not consistent with the terms of the Purchase Agreement, which do not give Buyer the option to delay closing once all closing conditions have been met.
As a result of the foregoing, on February 10, 2025, the Company filed a complaint in the Delaware Court of Chancery against Buyer seeking a grant of specific performance ordering Buyer to satisfy its obligations under the Purchase Agreement and consummate the closing in accordance with the terms of the Purchase Agreement. In the complaint, the Company also requests a declaratory judgment declaring that Buyer has breached its obligations under the Purchase Agreement and is not excused from performing its obligations under the Purchase Agreement, including proceeding with the closing.
The $241m transaction consists of a $233.5m purchase price and $7.5m for services over a twelve-month period, post close.
Asymmetrix Sector: Energy & Commodities.
🛍️ NielsenIQ to target raising $1.25bn in US IPO
NIQ (AKA NielsenIQ) is a Chicago, Illinois, US-based provider of market research and consumer insights, backed by Advent International and KKR.
According to Bloomberg, NielsenIQ, a consumer intelligence firm backed by buyout firms Advent and KKR & Co., is targeting raising about $1.25bn in a US IPO as soon as this summer.
The IPO could value the consumer intelligence firm at about $10bn.
NIQ is advised by JP Morgan.
Asymmetrix Sector: Marketing.
Announced M&A
🛣️ EasyPark Group acquired Parkopedia
EasyPark Group, a Stockholm, Sweden-based provider of digital parking and mobility solutions, backed by Vitruvian Partners, Verdane and Searchlight Capital Partners, announced the acquisition of Parkopedia, a London, UK-based provider of connected car services and mobility data aggregation, backed by Verdane.
Financial terms were not disclosed.
Asymmetrix Sector: Mobility.
🧑🌾 CoStar Group acquired Ag-Analytics
CoStar Group, Inc, a NASDAQ-listed, Arlington, Virginia, USA-based provider of online real estate marketplaces, information and analytics in the commercial and residential property markets, announced the acquisition of Ag-Analytics, a private, Ithaca, New York, USA-based agricultural data company.
Financial terms were not disclosed.
Asymmetrix Sector: Real Estate.
Cotiviti, a South Jordan, Utah, USA-based data-driven healthcare solutions, backed by KKR and Veritas, announced the acquisition of Edifecs, a Bellevue, Washington, USA-based provider of healthcare data interoperability, backed by TA Associates and Francisco Partners.
Financial terms were not disclosed, but the valuation is rumoured to be $3.05bn.
Cotiviti was advised by Goldman Sachs and TripleTree; Edifecs was advised by J.P. Morgan and William Blair.
Asymmetrix Sector: Healthcare.
🛢️ Crain Communications Inc. acquired Hart Energy
Crain Communications Inc., a private, Detroit, Michigan, USA-based business media and information provider, announced the acquisition of Hart Energy, a private, Houston, Texas, USA-based energy news and information business.
Financial terms were not disclosed.
Asymmetrix Sector: Oil & Gas.
📢 Yext acquired Places Scout
Yext, a NYSE-listed, New York, New York, USA-based digital presence platform for multi-location brands, announced the acquisition of Places Scout, a private, Huntington Beach, California, USA-based competitive intelligence and SEO reporting platform.
Financial terms were not disclosed.
Asymmetrix Sector: Advertising.
🛢️ Facts Global Energy acquired NexantECA and received investment from TA Associates
Facts Global Energy, a private, London, UK-based provider of market intelligence, data, research and analysis for the energy market, announced the acquisition of NexantECA, a London, UK-based energy and chemicals research and advisory business, a subsidiary of Resource Innovations.
Facts Global Energy also raised an undisclosed amount in funding from TA Associates.
Financial terms were not disclosed.
Asymmetrix Sector: Oil & Gas, Chemicals.
Later-Stage / Growth funding
🗣️ Lingopal.ai
New York, New York, USA-based translation platform.
Raised $14m in Series A funding led by DCM Ventures, with participation from Scrum Ventures and Marquee Ventures.
Asymmetrix Sector: Translation.
🧑🔬 BEKhealth
Research Triangle Park, North Carolina, USA-based chart abstraction and patient-matching platform.
Raised $4m in funding co-led by Hatteras Venture Partners and Boston Millennia Partners with participation from existing investors Excelerate Health Ventures, Martin Ventures; and new investors RTI International and WakeMed Innovation Fund.
Asymmetrix Sector: Life Sciences.
⚖️ Eudia
Palo Alto, California, USA-based legal AI provider.
Raised $105m in Series A funding led by General Catalyst, and including Floodgate, Sierra Ventures, Hakluyt Capital and Defy.
Asymmetrix Sector: Legal.
⚖️ Harvey
San Francisco, California, USA-based legal AI provider.
Raised $300m in Series D funding at $3bn valuation led by Sequoia and including Coatue, Kleiner Perkins, OpenAI Startup Fund, GV, Conviction, Elad Gil, and REV, the venture capital arm of RELX Group.
Asymmetrix Sector: Legal.
🕵🏻 Sardine
San Francisco, California, USA-based provider of fraud, compliance, and instant settlement solutions.
Raised $70m in Series C funding led by Activant Capital.
Asymmetrix Sector: GRC.
Sydney, New South Wales, Australia-based healthcare technology company.
Raised $112m in Series C funding co-led by Aware Super, ECP and existing investor, Horizons Ventures. New investors, such as Australia’s National Reconstruction Fund Corporation (NRFC), Ord Minnett and Wollemi Capital Group also participated, along with existing investors including Blackbird Ventures and Alpha JWC Ventures.
Asymmetrix Sector: Healthcare.
📈 ETFbook
Zurich, Switzerland-based ETF data & analytics platform.
Raised EUR4m in Series A funding from BlackFin Capital Partners.
Asymmetrix Sector: Financial.
💰 Daphne
New York, New York, USA-based fund management data platform.
Raised an undisclosed amount of funding from Bloomberg.
Asymmetrix Sector: Fund Management.
🏗️ BRKZ
Riyadh, Saudi Arabia-based B2B managed marketplace for construction materials.
Raised $17m in Series A funding from BECO Capital, Aramco’s Waed, 9900 Capital, Better Tomorrow Ventures, RZM Investment, Class 5 Global, MISY Ventures, Knollwood Investment Advisory, and Fluent Ventures.
Asymmetrix Sector: Construction.
Early-Stage
🪪 OneID
Manchester, UK-based identity verification provider.
Raised an undisclosed amount in funding led by ACF Investors.
Asymmetrix Sector: Identity.
Palo Alto, California, USA-based AI-driven platform for global trade compliance.
Raised $1.5m in pre-seed funding led by AI Fund and Zenda VC.
Asymmetrix Sector: Supply Chain; GRC.
👷♀️ AI-BOB
Stockholm, Sweden-based construction compliance platform.
Raised EUR2m in funding from CapitalT, Fund F and NCA.
Asymmetrix Sector: Construction, GRC.
🧮 Bluebook
Stockholm, Sweden-based accounting AI platform.
Raised $3m in funding from EQT Ventures and Y Combinator.
Asymmetrix Sector: Tax & Accounting.
💰 Datalign
Cambridge, Massachusetts, USA-based AI platform matching consumers with leading financial advisors.
Raised $9m in seed funding from Link Ventures.
Asymmetrix Sector: Financial, Marketplaces.
📧 If we have missed your deal, or you would like to talk, please email us at a.boden@asymmetrix.info.