Lexion is on a roll.
The Seattle startup that helps legal teams use AI to vet contracts has quadrupled revenue and added 50 clients in the past four months, including brands such as Outreach, Blue Nile, OfferUp and others.
Now the company is raising more cash to fuel growth, announcing an $11 million Series A round led by Khosla Ventures. It is one of the only Seattle-area startups to get funding from Khosla, a major Silicon Valley firm that has backed giants such as DoorDash, Okta, Opendoor, Square and others, including OpenAI.
Lexion, which grew out of Seattle’s Allen Institute for Artificial Intelligence, uses algorithms to automatically analyze contracts and display relevant information. It produces an organized, searchable repository and various reports.
The idea is to help legal teams that are currently using a mix of tools like Dropbox and Excel. Lexion can quickly answer questions either on its platform or within other applications such as Slack or Salesforce about whether a contract is active or if they have termination clauses.
The 30-person company is part of a fast-growing segment called contract lifecycle management (CGM) systems that includes heavy hitters like Seattle-area unicorn Icertis and several others.
Lexion focuses on smaller mid-market companies that have a handful of legal experts whose time would be better spent on something other than wading through documents. Lexion’s simplicity, fast onboaring and state-of-the-art natural language processing technology give it an edge over competitors, according to CEO Gaurav Oberoi.
“It’s going to allow lawyers to do what they thought they would do coming out of law school, as opposed to a lot of the administrative and menial tasks that end up taking up a big chunk of their time week in and week out,” said Lexion CEO Gaurav Oberoi.
Lexion plans to use Fresh Cash to go beyond reporting and workflow, helping companies streamline how contracts are approved and providing a dashboard that allows legal teams to manage the process.
“This combination of cutting-edge technology, with a simple and practical application, is exactly how the value of AI will be realized in corporations, which is why we believe Lexion has a winning edge in this space,” Vinod Khosla said in a statement. Khosla founded Sun Microsystems and launched his venture capital firm in 2004.
Oberoi co-founded Lexion with Emad Elwany and James Baird. Oberoi previously helped build BillMonk, a bill-splitting application that preceded Splitwise, and also created Precision Polling, an automated survey startup that was later bought by SurveyMonkey. Elwany previously worked as an engineer at Microsoft in artificial intelligence, and Baird is an engineer who hails from web development firm Pancake Labs.
Legal tech startups like Lexion are taking advantage of the pandemic tailwinds that accelerated digital adoption within the legal industry with the shift to remote work. Clearbrief is another newer Seattle startup that also uses AI,but for legal writing analytics.
CB Insights ranked Lexion as the most promising AI legal technology startup in the last two years.
Lexion previously raised a $4.2 million seed round in 2019 from Madrona Venture Group and law firm Wilson Sonsini, Goodrich and Rosati, which again participated in the Series A round. Kanu Gulati of Khosla Ventures will join Lexion’s board as a result of the new financing. Total funding to date is $15.2 million.
Other AI2 spinouts include Kitt.ai (acquired by Baidu in 2017), Xnor.ai (acquired by Apple in 2020), Why Labs, Blue Canoe, WellSaid Labsand Panda AI.