Spellbook raises $50-million USD Series B led by Khosla Ventures

Toronto-based legaltech startup Spellbook, which provides an artificial intelligence (AI)-powered contract review platform for lawyers, has secured $50 million USD ($69.9 million CAD) in Series B funding.

“The level of agility needed to be in this market is extreme and unlike ever before.”
Scott Stevenson, Spellbook

The all-equity round was led by one of Silicon Valley’s most notable venture capital firms, Khosla Ventures, under the direction of managing director Keith Rabois, who is joining Spellbook’s board. The round also saw participation from Threshold Ventures and returning investors Inovia Capital, Bling Capital, Moxxie Ventures, Path Ventures, and former Shopify CTO Jean-Michel Lemieux.

The new funding will help expand Spellbook’s tool beyond contract review and scale its go-to-market team, the company said in a statement. Spellbook CEO Scott Stevenson told BetaKit that Spellbook will grow its team from 115 (110 of which are in Canada) to 230 employees over the next one to two years. He added that the company will likely raise debt for acquisitions in the future as it anticipates industry consolidation.

Spellbook claimed its platform has reviewed more than 10 million contracts from nearly 4,000 customers across 80 countries, including Nestlé, eBay, and Kennedys Law. The company claimed it’s on pace to triple revenue this year, but Stevenson did not provide a specific figure.

“Spellbook is using technology to make law faster, better, and more transparent,” Rabois said in a statement. “It’s the Shopify and Square democratization story for lawyers.”

The fresh capital brings Spellbook up to a $350 million USD post-money valuation. Spellbook has raised over $80 million USD to date. The startup last raised $20 million USD ($27 million CAD) in Series A funding, led by Inovia, in January 2024.

Founded as Rally out of St. John’s, NL in 2018, Spellbook’s self-described “AI co-pilot for lawyers” (or “Cursor for contracts”) helps legal practitioners review and draft contracts through a Microsoft Word integration. Spellbook claims its platform provides “relevant and substantive suggestions” grounded in real-time data rather than so-called “AI slop.” Hundreds of lawyers have been caught using AI tools after false legal cases showed up in their work.

Spellbook has frequently updated its features, such as a new AI agent to automate workflows. Stevenson said Spellbook aims to be the world’s first “high-frequency software,” likening the effect AI has on software to the stock market moving from slow floor trading, to electronic trading, to high-frequency hedge funds making thousands of trades per day.

“Every six months, we can do new things that we couldn’t do before. It’s a completely different mindset,” Stevenson said. “The level of agility needed to be in this market is extreme and unlike ever before.”

Feature image courtesy Spellbook.