While valuations of public software-as-a-service companies have been under pressure of late as investors keep the industry cool amid a broader, post-pandemic sell-off of tech stocks, SaaS startups still need to raise funding to expand their business. Scaling up nascent companies. — or, well, they hope they’ll be able to do so on reasonable terms despite these wider market bumps.
Today, London-based Legl — a 2019 SaaS startup that sells tools to law firms looking to digitize processes and automate workflows in areas such as customer onboarding, payments, and compliance to support a more modern customer experience — announces its closure. Of an $18 million Series B round, just over a year after it raised a $7 million Series A.
Series B was led by several tech investors, including existing investor Octopus Ventures (which led Series A), though Legl doesn’t specify the round’s other backers. Previously disclosed investors in the company include Backed, Samaipata, and First Round Capital, plus several angels.
The startup says it has expanded its client base from around 100 UK-based law firms in March 2021 to 170+ now – which it specifies to include 20 of the Top 200 firms in the country.
It will use Series B to kick-start its planned international expansion, targeting other markets where its UK customer base has offices and is investing in product development and staffing.
“There is a global opportunity for law firms to run their businesses in a more modern, efficient, revenue-oriented, and customer-friendly way. We are working with our client base to expand into their international offices in multiple geographies,” said Founder and CEO Julia Salasky.
“Over the past year, we have expanded our vision of a new category in the legal space – client lifecycle management – by investing in the underlying CRM that enables law firms not only to digitize previously manual business workflows across the entire client lifecycle but also to understand the customer base better. We have immersed ourselves in our core competencies in risk management, compliance, and payments and finance, enabling law firms to undertake activities that touch upon their regulated business processes, improve cash flow and improve customer experience.
“With the new funding, we will expand our workflow-driven approach to business management, focusing on how law firms can drive faster revenues, better and lower-risk financial management, and a better client experience. We are already enabling law firms to manage much of their client base and payment package and plan to develop more capabilities for more firms in the coming months,” she adds.
Salasky, whose name may also be known as the former founder of the CrowdJustice platform, tells us that Legl has seen 3x revenue growth in the past year and 150% net revenue retention, suggesting that its SaaS is proving to be a big hit with law firms.
She declined to disclose the startup’s valuation for Series B but confirmed that the increase was certainly not a downturn.
“This is a big round for us! Last round we raised $7 million last year, and this is an $18 million round (closed in this new funding environment!), building on the revenue growth and momentum we’ve had,” she notes.
As to whether the SaaS startup is experiencing any impact from a broader market cooling in technology and SaaS stocks, she adds, “Law firms are notoriously counter-cyclical firms, so they don’t tend to suffer as much as traditional businesses in a downturn, but overall, as we show more value to law firms and drive better core businesses, we become more, not less valuable, regardless of market conditions.”
In recent years, legal and compliance technology has been an increasingly active category for startups. But Salasky suggests most of the action has focused on contract management or other targeted “point solutions.” At the same time, Legal aims to differentiate itself by providing a more holistic platform for law firms to increase their ability to serve clients by providing them with a range of digital tools that can automate and support their business operations. This frees internal expertise to focus on more core legal work.
“There has been an explosion of investment in contract management and other areas where substantive legal work could be improved. But what we do at Legl takes a different approach: we’re focused on the legal business, on running a complex regulated business that puts customers first. Where there’s been very little getting in the way of cloud-based technology so far,” she suggests.
In a statement regarding the Series B, Octopus Ventures investor Malcolm Ferguson added: “We are delighted to continue supporting Julia and the team in their mission to free up lawyers’ time so they can focus on creating value for their clients. The firm has grown over the last 12 months and positions itself as the go-to solution for law firms looking to modernize and automate their non-core activities, improving their revenues and margins and[it] also means they can provide a much better experience for their customers. We are excited to see what Julia can achieve with this funding in the coming years.”
