Clio, the Canadian management platform for lawyers, recently announced a Series F investment round totaling 900 million dollars and investors of the caliber of New Enterprise Associates (NEA), Goldman Sachs, Sixth Street and CapitalG. The number, which is brutal, had already caught the market’s attention in the previous round, whose valuation almost doubled, now at around three billion dollars.
But what does Clio have?
In an interview for Bob Ambrogi’s famous blog, founder Jack Newton presented some interesting figures. Firstly, annual recurring revenue of 200 million dollars. Not bad for a legaltech company in a market that is increasingly saturated with cloud services and platforms with more and more symmetries. A large part of the platform’s customers are small and medium-sized businesses, whose value is of interest to Clio. In the United States alone, there are more than a thousand medium-sized offices, not to mention thousands of self-employed professionals, whose software is recommended by hundreds of local associations, in other words, NPS at its highest level.
Expansion into other markets, such as Asia, has obviously caught the attention of investors. But another detail is more representative: Clio’s pioneering spirit in developing and, of course, betting on legal cloud technology, when everything was still rudimentary. It has to be said that this move was very similar to that of Salesforce, in other words, the first mover is a classic characteristic of visionary entrepreneurs. It’s worth remembering that Clio was one of the first legaltechs on the market, founded almost two decades ago. In other words, seniority here is rank.
Another relevant movement is Clio’s dynamism in adapting to the demands of the legal market. New tools have been developed, such as “Clio Duo”, a generative AI legal assistant integrated into all its products. Clio Manage” and ‘Clio Draft’, the latter incorporated through the acquisition of another legaltech company, Lawyaw. Recently, “Clio Payments”, a payment platform, was announced.
As you can see, we have three factors typical of the successful: constantly “killing” the business, in the old Schumpeterian maxim, as well as acquiring other smaller, attractive companies, which will give you a competitive advantage, without wasting so much time on research and development, and also in the one-stop-shop model, after all, the lawyer will be able to have everything he needs in one place.
It should not be forgotten that the legal market is one of the fastest-growing when it comes to the interests of global venture capital funds. Here, we have a fertile business model based on SaaS platforms and B2B. Not to mention that countries like India and Brazil each have a backlog of more than a hundred million cases. Hyper-judicialization, coupled with the fact that there is a gigantic datalake, has caused a perfect storm for the match between these funds and Clio. That’s why the record funding is also justified.
And speaking of the match between venture capital funds and Clio, Newton comments that NEA’s entry as an investor in this latest round, including on the board, will greatly help the movement of a future (near) IPO. Salesforce itself had NEA on its board when it made its public offering.
However, the co-founder assured us that Clio, at the moment, can afford not to go public, given that it has more than a hundred million dollars in cash. But when it comes to longevity, another characteristic typical of “off the beaten track” founders, an IPO is certainly on the horizon.
This scribe has no doubt: Clio will be the first legaltech company to go public.
