Clio secures $500-million USD Series G as it completes vLex acquisition

Clio has closed a $500-million USD Series G round and another $350 million in debt to complete a landmark deal as part of a transaction that began six months ago.

The Burnaby, BC-based legaltech company announced plans in July to buy Spanish-American peer vLex for $1 billion USD in cash and stock. The purchase, which has now closed, allows Clio to advance its artificial intelligence (AI) vision while aiding its growth internationally and among large law firms.

“Do we have aspirations to be a public company? Absolutely … I think we’ll just do that when it makes sense for us.”
Curt Sigfstead,
Clio

In an interview with BetaKit, Clio CFO Curt Sigfstead said that the company needed to raise some additional capital “effectively and quickly” to help finance the acquisition and was able to do so by turning to existing backers and the debt market.

He said a “substantial” portion of the $850 million USD was used to fund Clio’s purchase of vLex, but did not disclose the exact amount. The $1-billion price tag also included “a significant” but undisclosed amount of stock in Clio.

All 350-plus vLex employees are joining Clio, bringing the firm’s overall headcount to 2,000.

Sigfstead described Clio’s vLex acquisition as “a really big deal.”

“It basically puts the two pieces together for us to have what we’ve talked about as ‘the intelligent legal work platform,’ which is effectively providing legal professionals with a platform that … helps them not only run their business, but also execute on the [legal] work that they’re doing each day,” Sigfstead said.

Clio sells software designed to help lawyers manage their legal practices more efficiently by centralizing functions like client intake, case and document management, and payments. The company has been increasingly leveraging AI to ensure its platform can also help customers complete actual legal tasks.

Clio’s all-equity, all-primary capital Series G came at a $5-billion USD post-money valuation. That’s a significant increase compared to the $3 billion that many of the same investors valued the company at in summer 2024, when Clio closed $900 million in Series F financing (which consisted “substantially” of secondary). It further cements Clio’s status as one of Canada’s most valuable tech companies, placing it just behind the likes of Cohere, Hopper, Wealthsimple, and 1Password.

Prior to this round, Clio had raised more than $1.2 billion USD in total funding. The firm’s $500-million Series G was led by New Enterprise Associates, with support from fellow existing American backers TCV, Goldman Sachs Asset Management, Sixth Street Growth, and JMI Equity, while its $350-million debt facility was co-led by US-based Blackstone and Blue Owl Capital.

In addition to helping Clio get the vLex transaction across the finish line, Sigfstead said the funding also puts some additional cash on Clio’s balance sheet to fuel strategic investments in international growth, product expansion, and further mergers and acquisitions (M&A).

Clio recently surpassed $400 million USD in annual recurring revenue after doubling since hitting $200 million in summer 2024. Today, Clio caters to more than 400,000 legal professionals. Sigfstead did not share any updated profitability metrics.

This revenue milestone is the same mark that 1Password announced it hit while remaining free cash-flow positive last week, which CEO David Faugno told BetaKit gave it “the scale and profitability” to be a public company today.

The CFO did not offer any timeline for when Clio might go public, emphasizing that the company’s focus is on building a “100-year business” and it has secured the capital necessary to continue executing on its strategy for the time being as a private business.

“Do we have aspirations to be a public company? Absolutely … I think we’ll just do that when it makes sense for us,” Sigfstead said.

AI “foundational” to Clio’s vision

Clio’s latest round is one of a string of recent $100-million USD-plus Canadian tech financings, from Toronto-based FinTech company Wealthsimple, to fellow AI players like Toronto’s Cohere and Beacon. Others, some of which had large secondary components, include Burnaby heart device maker Kardium, Vancouver-based clinic management platform Jane, Toronto adtech StackAdapt, and Toronto-based corporate VPN provider Tailscale.

AI is already disrupting the legal industry in a variety of ways, and investors appear to have recognized this: amid the AI boom, funding for legaltech companies has been on the rise this year. Law360 found that in Q1, legaltech financing surged 80 percent year-over-year.

Sigfstead described AI as “foundational” to Clio’s vision for the future of legaltech. He said this belief has been borne out by the company’s launch of Duo last year, the ways it has already been leveraging AI within its core platform to help lawyers run their businesses, and the size of its investment in vLex.

According to Sigfstead, Clio’s plan does not involve taking lawyers out of the equation but helping them complete their work more effectively and efficiently. “That’s really the foundation behind the intelligent legal AI work platform,” he said.

In the field of law, the stakes associated with getting things wrong are high: the CFO noted that incorrect answers or hallucinations can lead to lawyers being fired or disbarred.

This, Sigfstead said, makes the legal data used for AI training and reference all the more important. Enter vLex, which he claimed gives Clio access to “arguably the best legal database and data assets in the world” thanks to its global nature.

“There’s really three datasets like this on the planet,” he said. “It’s what we have, what Thomson Reuters has, and what LexisNexis has. We think a lot of competitors are going to find it increasingly difficult to compete against that database.”

Sigfstead described Clio as a leader in the legal practice management software industry. Among tech companies that cater to big law firms, the CFO said it expects to be competing against larger, more established legal software players like Toronto-based Thomson Reuters and New York’s LexisNexis as well as fellow AI upstarts like San Francisco-based Harvey—which is expanding to Clio’s home turf—and Sweden’s Legora.

Clio, which expects enterprise legal customers to become “a material” portion of its business over the coming years, has made some inroads into serving them through the vLex deal, its purchase of UK-based ShareDo earlier this year, and the recent launch of its enterprise division.

Sigfstead argued that vLex’s database gives it a leg up compared to newer competitors in the legal AI space and asserted that while existing legal software providers have built their businesses around supporting legal research, they might have a tougher time adjusting to how lawyers are going to work going forward using AI.

“We feel like we’ve got a really strong strategic positioning here versus our competition,” Sigfstead said.

As to what Clio’s M&A strategy might look like going forward, Sigfstead said it is safe to expect the company to pursue “more of the same,” with acquisitions aimed at accelerating the company’s product roadmap but of a smaller scale given the size of the vLex deal and the work Clio still needs to do over the coming months to integrate the two businesses.

Feature image courtesy Clio.