LinkSquares benefits from the legal tech boom with a fresh $100M – TechCrunch

Demonstrating that there is a strong market for contract management solutions, LinkSquares, a company that develops intelligent software that helps brands maintain and sign new contracts, today announced it has raised $100 million in Series C funding led by G Squared. The tranche, which saw the participation of new investor G2 Venture Partners as well as existing backers, brings the startup’s total funding to $161.4 million at a valuation of $800 million.

“With this new investment, we will continue to grow our business with in-house legal teams, we will continue to increase our presence in international markets, such as Canada, the United Kingdom and Australia, [and build a] multi-product suite that expands beyond contract lifecycle management to other use cases for internal legal teams,” CEO Vishal Sunak told TechCrunch via email. “[We] I think…there is an opportunity to create more products that the entire legal team can use in areas like IP management, outside counsel, [and] Government Risk Compliance”.

Founded in 2015, LinkSquares was inspired by Sunak and Chris Combs’ work with contracts and due diligence over the course of a company acquisition. Combs was leading business development at Backupify when it was acquired by data backup company Datto, now owned by Vista Equity Partners, in 2015, while Sunak served as Datto’s chief operating officer.

“During that time, it was all hands on deck like [Backupify] lined everything up to support the acquisition,” explained Sunak. “Datto hoped to migrate Backupify customer data to their cloud infrastructure. However, an obstacle to this business goal was understanding each individual customer contract signed and determining whether Datto had the right to move the data without permission. The idea of ​​reviewing each contract, reading the provision related to data transfer, and storing the response seemed simple, at first. In reality, because Backupify had negotiated over 2,000 contracts, the act of finding all the contracts and looking up the language of provision was an impossible task.”

It turned out that Backupify wasn’t the only company struggling to get information out of their contractual agreements. According to World Commerce & Contracting, almost 40% of organizations do not have a clear idea of ​​who is responsible for their contracts internally. Previous unaffiliated research from the Blickstein Group suggests that most organizations track only basic contract management metrics, such as volume by customer, partner, program type, and geography.

Combs and Sunak sought with LinkSquares to build a platform that combines legal analysis with sophisticated contract lifecycle capabilities. Leveraging artificial intelligence and “experience from leading legal clients,” LinkSquares helps companies draft contracts, analyze the content of existing documents, and collaborate with other teams across the organization, says Sunak.

Image credits: LinkSquares

“The in-house legal department brings a unique skill set to a company that has real value to stakeholders up and down the corporate ladder, but are often seen as the company’s bottleneck. Modern legal teams need to cement their seat at the executive level. To do this, they need to have consistent and accurate data at their fingertips,” Sunak said. “[L]Legal teams also have needs outside of contract lifecycle management and are often forced to use stand-alone single-use products that don’t integrate with other company business systems, creating significant challenges for adoption, usage, and data flow.

LinkSquares offers post-signature analytics and a contract search repository, enabling companies to use AI to extract both data and metadata from contracts. Sunak claims that the platform, which has processed more than four million documents and more than 100 million unique data points to date, can generate approximately 115 contract metadata responses in 20 seconds.

Beyond this, LinkSquares integrates with services from Salesforce, Adobe, DocuSign and HelloSign and next week will get an in-house e-signature solution, LinkSquares Sign, to offer “end-to-end” contract lifecycle management. .

“For our contract lifecycle management product, our pre-trained contract metadata extraction technology runs right out of the box with no user training required… Our goal is to have 250+ extract values ​​out of the box by the end of the contract lifecycle management product. of the year,” added Sunak. “In addition, we now have…benchmarks on what our clients are trading in real time and really interesting trend data on the use of certain provisions, language and clauses, which we are happy to publish later this year and even put this on our product as a way for legal teams to better understand their position in negotiations.”

growing market

Gartner projects that legal department budgets allocated to technology will triple by 2025. 2021 was already a record year for legal technology, with $1.4 billion invested by venture capital firms in the first half of the year, more than in all of 2020 and well above what was raised in 2018 and 2019, according to data from Crunchbase.

LinkSquares, which has 550 clients including DraftKings, Igloo and Wayfair, hit more than $20 million in annual recurring revenue (ARR) in 2021, Sunak says. The plan is to increase ARR by 150% by the end of 2022 and double LinkSquares’ workforce to 500 employees.

“We believe that LinkSquares is well positioned to address this critical need with what we believe to be market leading proprietary AI. We see the success of the company to date due to its best-in-class financial metrics and win rates,” Spencer McLeod, a partner at G Squared and head of research, told TechCrunch. “The management team has a vision to transform this space and we believe that through continuous execution and product innovation, LinkSquares can redefine the way modern legal teams operate.”

But spending and investments in legal technology do not necessarily correlate with adoption. For example, according to a 2020 American Bar Association study, only 58% of businesses use cloud-based data storage, while only 7% use AI-enabled tools (eg, ContractPodAI, Cognitiv+ and SirionLabs).

Historically, obstacles to technology deployment in the legal field have included time constraints, cost issues, and a lack of commitment to skills training. Business managers tend to view any non-billable activity, such as training, as a waste of time. Sunak himself acknowledges that, over the last decade, contract lifecycle management vendors have provided a poor buying experience.

That’s all to say that software like LinkSquares is not a panacea. Effective contract management requires improving internal processes and nurturing, or reinforcing, relevant employee skills. Only then can contract value improvements be made through cost reduction and revenue enhancement, a message that LinkSquares will need to clearly communicate as it seeks to retain and grow its customer base.

“[Vendors have sold] feature-rich products, complex implementations, [and an] overemphasis on pre-signing workflows as the solution to every contract management problem,” said Sunak. “[But we’re] see a lot of wind coming into the sails now and for years to come as forecast… The [contract lifecycle management space] It has a lot of activity, which is very positive. Legal technology and contract management specifically is a hot space and it’s great to see contract management and contract lifecycle management being supported by companies like DocuSign and Icertis.”

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