Kira Systems recently secured $50 million in its first round of funding. This took place as its automated contract review became increasingly popular among both corporate clients and large law firms.
The funding came from a venture capital and private equity investor in software business, Insight Venture Partners. According to the CEO of Kira Noah Waisberg, the fundraising catapulted the company ’s valuation to a nine-figure number.
The $50 million fundraised investment represents the first time ever for Kira to receive external funding. Currently, the “bootstrapped” Toronto-based company, founded by Alexander Hudek and Waisberg back in 2011, has grown to nearly 115 employees from only 35 employees at the beginning of 2017.
Furthermore, Waisberg said that Kira System’s revenue has also grown by nearly 100% yearly. However, he declined to disclose the specific details but said that the financing would assist Kira to grow as it endeavors to tap into “latent demand”, particularly for contract review services.
“There is a huge amount of legal work and contract review that is not done and it is not done because it is economically impossible to get through the volume of documents that need to be reviewed,” said Waisberg.
He went ahead to say, “and our true opportunity is helping people tackle that latent demand of contracts that might be reviewed but aren’t right now.”
Waisberg said that although a regular acquisition of a $200 million entity may now entail the reviewing of almost 100 contracts, Kira’s software can be utilized in expanding that number considerably since it can reduce the time for reviewing contracts by 90%.
Waisberg, Weil, Gotshal & Manges’ former associate stressed this point by saying: “ if you think about a world where instead of reviewing 100 contracts, people are reviewing 5,000, you have to have a world where it’s easier to get the contracts into the software and getting it out. So the company would put a lot of work into building automated systems that make that action happen.”
According to Waisberg, Kira will channel its energy towards creating a product that provides clients with “answers”, particularly to their contract issue as opposed to just identifying certain elements of a contract.
This will help the company in making automated contract review increasingly widespread. Kira is also expected to roll out over 100 new provisions, which can be detected by its software even before the client trains the software. He added that Kira’s software will be in a position to spot almost 550 provisions.
Kira ’s growth was expedited back in 2014 with the subscription of Deloitte. The Big Four accounting firm has over 5,000 professionals using Kira. According to Waisberg, the figure marks the biggest deployment of AI software by any professional services company.
Since 2016, big law customers including Freshfields Bruckhaus Deringer, Fenwick& West, DLA Piper, and Clifford Chance have also been Kira ’s subscribers. Also, since the beginning of 2017, five of the top 10 Vault legal directory ’s ranked firms are already signed up to Kira. Waisberg also added that most of the leading 30 firms in the AM Law 100 currently utilize Kira.
“ I don’t’ know that we could comfortably have grown much quicker than we have been, and we still had financial room to grow without this raise, but we think there is a lot of opportunity around contract review. Massive amounts of time are still spent reviewing contracts and people still aren’t getting all the information they might out of them,” claimed Waisberg.
Insight Venture Partners’ managing director Peter Sobiloff, will become part of Kira’s board as a result of the financing round. What’s more, Insight ’s senior associate Jonathan Rosenbaum will assume the role of a board observer.
“Kira Systems’ performance as a bootstrapped business has been impressive, and we’re eager to partner with them to more aggressively pursue growth. We don’t see many pure-play AI businesses with their traction, and this success has come from the fact that Kira is fundamentally changing how contracts are reviewed.
This represents an opportunity to make a meaningful impact across their core market segments ” said Sobiloff.
Back in April, an AI-based contract review platform, LawGeex, revealed details about a $12 million Series B financing round that was led by Aleph, an Israeli-based VC firm. So far, LawGeex has secure almost $22 million.