- Law firms
- Khosla Ventures led Series A funding round
- Seattle-based company spun out of Allen Institute for AI in 2019
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(Reuters) - Lexion, an artificial intelligence-powered contract management startup aimed at in-house legal teams at mid-market companies, said Thursday that it secured $11 million in a Series A funding round.
Venture capital firm Khosla Ventures led the oversubscribed round for Seattle-based Lexion. Law firm Wilson Sonsini Goodrich & Rosati and venture capital firm Madrona Venture Group, which both previously invested in Lexion's $4.2 million seed round in 2019, also participated in the fresh round.
Lexion, which co-founder and CEO Gaurav Oberoi described as an "intelligent contract repository," spun out of the Allen Institute for AI (AI2) in 2019. AI2, a research institute, was created by Microsoft co-founder Paul Allen.
Lexion pulls contracts into its natural language processing system, which then extracts basic and sophisticated pieces of information from the contracts and delivers that data in an "easy to use repository" that has search, reporting and other capabilities for legal teams, Oberoi said.
The company has seen "spectacular growth," he said. It started out as a three-person team in 2019, with co-founders Emad Elwany and James Baird. The company has since hired engineers and research scientists from tech giants including Google and Microsoft, and has plans to double the now-31 employee team in the next 12-18 months.
Vinod Khosla, founder of Khosla Ventures, in a statement pointed to the team's technical expertise in AI and building software as a service (SaaS) products.
"We invested in Lexion because their team has the rare combination of deep technical expertise in building sophisticated AI systems, and a proven track record in delivering SaaS applications that solve real problems," Khosla said.
Lexion has increased revenues by 400% in the past six months and brought on customers including online marketplace OfferUp, sales platform Outreach and online jewelry retailer Blue Nile, according to the company. Lexion also brought on a chief legal officer in February 2020 when it hired Jessica Nguyen, formerly general counsel at PayScale, Oberoi said.
The company's mission with the fresh funding is growing the business, which includes investing in sales and marketing and expanding its platform to help in-house counsel manage the whole contracting process through a workflow tool, Oberoi said.
Lexion's customers typically are companies that have about 1,000 employees and a small legal team, but customers range from those with 100 employees to those with 10,000, he said.
Palo Alto-based Wilson Sonsini is not only an investor, but also a customer. While most customers use Lexion to manage commercial contracts, Oberoi said the law firm turns to Lexion to handle venture financing documents.
Asked if Lexion sees an opportunity to work with other law firms in that capacity, Oberoi said the company may do that but will keep the focus on growing its primary product for in-house counsel. However, there is a "fairly large addressable market across a select set of firms that do these kinds of financings," he said.