While valuations of public software-as-a-service businesses have been taking a hammering of late as investors cool on the sector amid a wider, post-pandemic tech stock sell-off, SaaS startups still need to raise funding to scale their budding businesses - 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-founded SaaS startup that sells tools to law firms wanting to digitize processes and automate workflows in areas like client onboarding, payments and compliance to support a more modern customer experience - is announcing the close of an $18 million Series B round, just over a year after it raised a $7M Series A.
The Series B was led by several technology investors, including existing investor Octopus Ventures (which led its Series A), although Legl isn't specifying the round's other backers. Previously disclosed investors in the business include Backed, Samaipata and First Round Capital, plus a number of angels.
The startup says it has grown its customer base from around 100 UK-based law firms back in March 2021 to 170+ now - which it specifies includes 20 of the Top 200 firms in the country.
It'll be using the Series B to kick off planned international expansion, focusing on other markets where its UK client base has offices and ploughing cash into product dev and hiring.
"There is a global opportunity for law firms to run their businesses in a more modern, efficient, revenue-driving and client-friendly way. We are working with our client base to start expanding out to their international offices which lie across multiple different geographies," says founder and CEO, Julia Salasky.
"Over the past year, we've built out 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 client lifecycle but to understand their client base better. We've leaned into our core competencies in risk management, compliance and payments and finance, enabling law firms to both undertake activities that touch on their regulated business processes but also improve cashflow and drive better client experience.
"With the new funding we will expand our workflow driven approach to managing business operations and in particular focus on how law firms can drive faster revenue, better and de-risked financial management and a better client experience. We already enable law firms to manage a large proportion of their client base and payment stack and plan to drive more capabilities for more firms over the coming months," she adds.
Salasky, whose name may also be familiar as prior founder of the CrowdJustice platform, tells us Legl has seen 3x revenue growth over the past year and 150% net revenue retention, suggesting its SaaS is proving a sticky hit with law firms.
She declines to disclose the startup's valuation for the Series B but confirms the raise was certainly not a down round.
"This is a big up round for us! Last round, last year we raised $7M and this is an $18M round (closed in this new funding climate!), building on the revenue growth and momentum we've had," she notes.
Discussing whether the SaaS startup is feeling any impact from a wider market cooling on tech and SaaS stocks, she adds: "Law firms are notoriously counter-cyclical businesses, so they don't tend to suffer as much as traditional corporates in a downturn. But in general what we see is that as we demonstrate increased value to law firms and drive better core business operations, we become more, not less valuable, irrespective of market conditions."
Legl founder and CEO, Julia Salasky (Image credit: Legl)
Legal and compliance tech has been an increasingly active category for startups in recent years. But Salasky suggests most of the action has focused on contract management or other targeted 'point solutions,' whereas Legl aims to stand apart by offering a more holistic platform for law firms to power up their ability to serve clients by providing them with a suite of digital tools that can automate and support their business operations. This frees up in-house expertise to focus on more of the core legal work.
"There is an explosion of investment in contract management and other areas where the substantive legal work could be improved. But what we are doing at Legl takes a different approach - we are focused on the business of law, on the running of a complex regulated business that has clients at its heart, and where to date there has been very little in the way of cloud-based technology," she suggests.
Commenting on the Series B in a statement, Malcolm Ferguson, investor at Octopus Ventures, added: "We're delighted to continue to support Julia and the team on their mission to free up lawyers' time so they focus on creating value for their clients. The company has grown really strongly over the last 12 months, and is positioning itself to become the go-to solution for law firms looking to modernise and automate their non-core work. Not only does this improve a law firm's revenues, and margins, but [it] also means they can deliver a meaningfully better experience to their clients. We're excited to see what Julia can achieve with this funding over the coming years."