Toronto-based legaltech startup Spellbook, which provides legal practitioners a generative artificial intelligence (AI)-powered tool for contract review and drafting, has secured $20-million USD ($27-million CAD) in Series A funding.
Spellbook said its customer base has grown 300 percent over the past seven months.
The all-equity round, which closed this month, was led by Inovia Capital and saw participation from returning investors, including Thomson Reuters Ventures, The Legaltech Fund, Bling Capital, Moxxie Ventures, Concrete Ventures, N49P, Path Ventures, and Good News Ventures.
Spellbook said in a statement that, with this Series A round, its total funding to date now exceeds $30 million.
“With the new capital, we’ll continue innovating within the legal AI sector, partnering with the most law firms of any generative AI that we know of –and more importantly, to continue delivering new value to our customers,” Spellbook co-founder and CEO Scott Stevenson said in a statement.
Founded as Rally out of St. John’s, Newfoundland in 2018, the company’s self-described “AI copilot for lawyers” uses large language models (LLMs) like OpenAI’s GPT-4 to help legal practitioners draft and review contracts. Through a Microsoft Word integration, users can prompt Spellbook to review contracts and it will generate comments and suggestions.
For example, a lawyer could ask Spellbook to create a contract draft with aggressive negotiation tactics, or to repurpose an existing contract by changing key names or location-based terms.
As Rally, the company received $750,000 in pre-seed funding in 2019 before rebranding to take on the name of its tool, Spellbook, following its $10.9-million seed round in May 2023. Spellbook claims in the past seven months, its customer base has grown by 300 percent to include over 1,700 law firms and legal teams. Spellbook claimed that more than 86,000 contracts are being opened by the Spellbook platform each month.
“The legal landscape is a prime example of value creation through the careful and appropriate use of [LLMs],” Inovia Capital partner Steven Woods said in a statement. “Spellbook demonstrates what can happen when one deeply integrates new capabilities into high-priority workflows and relentlessly experiments, measures, and iterates to drive the most value.”
As a result of Inovia’s participation in the round, Woods is joining Spellbook’s board of directors.
Spellbook said it plans to use the funding to quickly scale its solution to 30,000 law firms worldwide while continuing to add new functionalities that mimic “the style of a lawyer” to its platform.
UPDATE (01/24/24): This story has been updated with details shared by a Spellbook spokesperson.