Toronto-based legaltech startup Haloo has closed $4.7 million CAD ($3.5 million USD) in funding to scale its trademark search solution.
This all-equity, all-primary round, which was classified as early Series A financing, was led by a Boston-based artificial intelligence (AI)-focused venture capital firm Innospark Ventures. Other participants included the Crown corporation BDC through its women-focused Thrive platform, as well as LOI Venture, which was created by Hootsuite founder Ryan Holmes and New Avenue Capital founder Manny Padda. Existing investors, including W Fund, also participated in the round.
“This next stage will allow the company to further build a strong, leading-edge product and remain highly competitive in the market.”
Haloo was launched under the name Heirlume by CEO Julie MacDonell and CTO Sarah Ruest. The startup’s initial concept for the platform was to help small businesses run a professional-quality trademark search, and then draft and file a trademark application.
The startup recently pivoted its business model, transitioning its focus from being the “GoDaddy of trademarking” to offering its solution under an enterprise software-as-a-service (SaaS) model.
MacDonell feels Haloo has found product-market fit under this new model, and is planning to use the next funding to “put some fuel on the fire” to scale the company.
Haloo’s service uses a machine-learning model, which the startup created itself, to replicate the complex human analysis that goes into comprehensive trademark searching, which is a process of investigating existing trademarks to determine whether a proposed trademark is available for use and registration.
“It really hyper-speeds the work of lawyers,” MacDonell told BetaKit in an interview. “In our platform, they can run 10 searches in under a minute, because we offer batch searching… To replicate that in human hours, that’s going to take about 12 hours of work.”
MacDonell said that after launching the company with its original business plan, the founders “realized we had actually developed the world-leading AI technology for trademark search, so that opened up this door to a whole new market.”
In 2022, around the time the startup raised its $2.9 million CAD seed round, the team realized that although they could sell directly to small businesses owners, the larger opportunity lay in selling to lawyers, trademark agents, and enterprise customers.
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MacDonell said Haloo decided to continue running its service for small businesses, but “package it into a white-labelled API to sell to domain registrars and anybody serving small businesses, so they can offer that transactional service as an upsell to buying a domain,” she added.
Haloo spent most of 2023 attempting to prove out this new model, and now MacDonell believes the results are in. In a statement, the startup said it now “serves several hundred SaaS customers” with its enterprise product. MacDonell declined to disclose the names of Haloo’s enterprise SaaS customers to BetaKit.
Today, the product is aimed to help intellectual property teams “wherever they live,” according to MacDonell. This includes lawyers, trademark assistants, and paralegals working in both law firms and enterprises.
Now that MacDonell feels Haloo has reached product-market fit, she wants to use the fresh injection of capital to scale from several hundred users to tens of thousands. To do that, the startup is focused on strengthening its sales, marketing, and recruiting efforts.
The firm recently hired Mark Jacobs to join as chief revenue officer. Jacobs brings over two decades of experience in the IP industry, previously serving as senior vice-president of global commercial services at Corsearch. MacDonell described getting Jacobs as a major win for the startup given its current stage.
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“It raised eyebrows in our industry that [Jacobs] came to be with us, because he had options to really go anywhere,” MacDonell added.
“He sees us as the disruptor to the industry. [He feels] that we’ve got some laggard competitors dominating this industry … and the type of AI that we’re building is really what’s going to shake things up,” she added.
The firm also recently hired Ignace Mouzannar as its vice-president of product and engineering. Mouzannar previously served at Montréal-based Smooch, which was acquired by Zendesk in 2019.
“[Mouzannar] really knows how to go from a few hundred users to tens of thousands of users with stability in the software, velocity in releasing features, all of that stuff,” MacDonell added. “That was a missing link for us.”
She also believes government trademark offices can also benefit from the software. In June 2023, the IP division of the Canadian Bar Association issued a letter to Canada’s deputy minister that said delays for trademark examination by the Canadian Intellectual Property Office (CIPO) have reached “unacceptable proportions.”
“For every four months of real time, CIPO examines only one month’s worth of trademark applications, falling further behind every month,” the letter stated.
“In 20 seconds, you can get a provisional approval on a trademark with AI through our technology,” MacDonell said. “You can imagine the impact that that would have on government offices [such as those] in Canada, for example. If they do adopt cutting-edge technology like this, they can really start to tackle backlogs.”
Kate Brodock, general partner at W Fund, praised Haloo’s work in identifying technologies that allow the legal industry to more effectively handle trademarking processes.
“This next stage will allow the company to further build a strong, leading edge product and remain highly competitive in the market,” Brodock said.
Feature image courtesy Unsplash. Photo by Gabrielle Henderson.