SoftBank-backed LegalOn lands $50M to streamline legal workflows with AI

Tokyo-based LegalOn Technologies, a frontrunner in AI contract review software, has successfully secured $50 million in a Series C funding round. This substantial investment is poised to significantly bolster its development of advanced AI agent tools and accelerate its strategic global expansion, particularly across the U.S. and U.K. markets.

The arduous and often manual process of contract review has long been a major bottleneck for legal teams, demanding countless hours from lawyers to meticulously analyze dense legal language, pinpoint risks, and interpret complex terms. LegalOn Technologies emerged in 2017 to tackle this pervasive challenge, offering a transformative AI-powered solution.

LegalOn’s flagship product, Review, is currently trusted by over 7,000 organizations spanning Japan, the U.S., and the U.K. The company proudly claims market leadership in Japan, with 25% of all public companies in the nation utilizing its robust platform. LegalOn asserts that Review can dramatically cut contract review times by up to 85%, while simultaneously enhancing accuracy and quality by identifying potential risks and suggesting precise edits based on attorney-built playbooks and each customer’s unique legal standards.

This latest $50 million Series C funding round was spearheaded by Goldman Sachs’ growth equity fund, with continued participation from existing investor World Innovation Lab (WiL). The round also welcomed new investors, including the esteemed Japanese law firm Mori Hamada & Matsumoto, alongside Mizuho Bank and Shoko Chukin Bank.

While a significant portion of the newly acquired capital will be channeled into the development of sophisticated AI agent products, LegalOn is also intensely focusing on amplifying its go-to-market efforts in the U.S. and U.K. These regions have shown remarkable growth, with the company’s business quadrupling over the past year.

Founded by two former corporate lawyers, Nozomu Tsunoda and Masataka Ogasawara, LegalOn’s initial vision extended beyond just contract review to streamline the entire legal workflow, encompassing the organization of legal requests and automated contract management. Daniel Lewis, Global CEO of LegalOn, highlights the company’s distinct advantage over other legal tech startups: its foundation in attorney-drafted, expert legal content.

“Our approach ensures contract reviews are aligned with real legal standards, making the output more accurate, consistent, and practical for legal teams. In addition, we have more than 50 attorney-built playbooks, seamless integration into existing workflows, and our solution works out-of-the-box on day one,” Lewis stated, differentiating LegalOn from generic AI models or tools that require users to build rules from scratch.

Recently, LegalOn expanded its suite of tools with the launch of Matter Management. This new offering assists legal teams in tracking contract requests, assigning ownership, connecting matters to relevant individuals and documents, and facilitating cross-departmental collaboration. Further solidifying its technological edge, LegalOn has also entered into a non-equity technical partnership with OpenAI, granting it early access to the ChatGPT maker’s advanced large language models. Lewis elaborated that this collaboration allows their engineers to work closely with OpenAI’s, accelerating their goal of developing cutting-edge AI agents grounded in LegalOn’s proprietary legal content and expertise.

The ongoing AI revolution is proving to be a powerful catalyst for legal tech startups globally. LegalOn’s success mirrors that of other industry players; in recent months, Harvey AI secured $300 million, pushing its valuation to $5 billion, and Clio also raised $300 million, reaching a $3 billion valuation.

Despite the transformative potential of generative AI, Lewis firmly believes it will not displace lawyers. “The state of the technology isn’t there yet, and replacing lawyers isn’t even our vision,” he affirmed. He posits that lawyers will remain in the driver’s seat, dedicating their expertise to tasks that AI cannot perfectly execute. The lawyers who embrace AI to oversee, edit, and exercise critical judgment are poised to gain the most significant leverage from this evolving technology.

The Series C round brings LegalOn’s total capital raised to over $200 million. Previous investors include prominent names such as SoftBank Vision Fund, HSG (formerly Sequoia Capital China), Japanese venture capital firm JAFCO, and MUFG Bank.