Happy Monday. It\u2019s Alexandra Sternlicht subbing for Allie.\u00a0<\/p>\n
Today, we\u2019re sharing news that legal LLM Harvey raised a $300 million Series E at a $5 billion valuation. The company, which sells lawyers AI solutions, lists large law firm customers like Paul, Weiss as well as in-house legal departments at major corporations, including KKR and PwC. With the fresh funding, Harvey plans to double its headcount to expand its global presence and diversity into new professional services like tax accounting.<\/p>\n
\u201cIf you expand as quickly as we are, you just need to do raises like this,\u201d says Winston Weinberg, who is the company\u2019s CEO, cofounder and a lawyer. Though Harvey is only about three years old, it has clients in 53 countries and boasts a 340-plus person headcount.\u00a0<\/p>\n
The Series E is co-led by Kleiner Perkins and Coatue. It counts Sequoia, GV, DST Global, Conviction, Elad Gil, Open AI Startup Fund, Elemental, SV Angel, Kris Fredrickson and REV (the VC group LexisNexis owner RELX Group) as participants.<\/p>\n
On Friday, I had the pleasure of visiting Harvey\u2019s swanky Park Avenue NYC headquarters. And it was filled with lawyers. Lawyers in the kitchen. Lawyers spinning in ergonomic chairs. Lawyers smiling and waving at me.\u00a0<\/p>\n
Though CEO Weinberg notes that the lawyer-workforce is unique to the company\u2019s New York office, and that only 18% of its headcount is lawyers, he believes that these attorney-employees are essential to achieve Harvey\u2019s goal of \u201cpartnering\u201d with the industry. So far the strategy is working: Harvey boasts 337 legal clients.<\/p>\n
Long before OpenAI released its first ChatGPT bot, entrepreneurs have been trying to make AI lawyers a thing. These companies have largely failed. Harvey, by its investors\u2019 accounts, is not failing.<\/p>\n
\u201cWe\u2019ve seen the company perform incredibly well across all facets,\u201d Kleiner Perkins\u2019 partner Ilya Fushman, who co-led this round as well as Harvey\u2019s Series B and participated in its C and D, tells me. \u201cIt sets the blueprint for how a vertical AI enterprise company can build and execute.\u201d<\/p>\n
Still, Harvey is just one solution in the crowded field of AI lawyers that aim to disrupt the $1 trillion legal market. Though it could be meaningless in the long-run, with this funding, Harvey has nabbed the highest public valuation of any legal AI startup. Competitors Ironclad raised a 2022 Series E at a $3.2 billion valuation and Clio raised a 2024 $900 million Series F at a $3 billion valuation.\u00a0<\/p>\n
Harvey\u2019s technology is built atop leading large language models\u2014OpenAI\u2019s ChatGPT, Claude\u2019s Gemini, and so on\u2014and combined with data and work flows designed for and by lawyers. It also customizes its models on firm-specific data by feeding the tech proprietary documents that remain private to the firm. While the security and privacy of client data is obviously critical in legal matters, Harvey says it<\/a> meets industry-recognized security standards, engages in regular third-party testing, and maintains that over 10% of its organization is security professionals.<\/p>\n Juan Pablo Sandoval Celis, a lawyer\/MBA, who works on the company\u2019s business development team says that customers have used Harvey to reduce legal processes from weeks to minutes.\u00a0<\/p>\n Of course, law firms make money from hours billed to clients. So lawyers finding efficiencies with Harvey could lead to an enormous revenue loss for these law firms. Weinberg notes\u00a0that certain legal work is increasingly billed via fixed fee, though certain specialized work will forever be billed hourly. He also believes that widespread use of AI will increase work for lawyers. Says Weinberg, \u201cI think it\u2019ll get to a certain point where you aren\u2019t able to compete\u2014or able to support large corporations\u2014unless you are using tools like this.\u201d<\/p>\n See you tomorrow,<\/p>\n Alexandra Sternlicht Nina Ajemian curated the deals section of today\u2019s newsletter.<\/em> Subscribe here<\/a>.<\/p>\n – <\/span>Pelico<\/b><\/a>, a Paris-based AI-powered supply chain orchestration platform, raised $40 million in funding. <\/span>General Catalyst <\/b>led the round and was joined by existing investors <\/span>83North<\/b> and <\/span>Serena<\/b>.<\/span><\/p>\n – <\/span>Profound<\/b><\/a>, a New York City-based AI visibility platform for brands, raised $20 million in Series A funding. <\/span>Kleiner Perkins<\/b> led the round and was joined by <\/span>NVentures<\/b>, <\/span>Khosla Ventures<\/b>, <\/span>Saga VC<\/b>, angel investors, and others.<\/span><\/p>\n – <\/span>Voliro<\/b><\/a>, a Zurich-based aerial robotics company, raised $7 million in Series A extension funding. <\/span>noa<\/b> led the round and was joined by existing investor <\/span>Cherry Ventures <\/b>and others.<\/span><\/p>\n – <\/span>Stackup<\/b><\/a>, a Los Angeles-based crypto digital asset management platform, raised $4.2 million in seed funding. <\/span>1kx<\/b> led the round and was joined by <\/span>Y Combinator<\/b>, <\/span>Goodwater Capital<\/b>, <\/span>Soma Capital<\/b>, and others.<\/span><\/p>\n – <\/span>COVR Global<\/b><\/a>, a London-based AI-powered decision engine for insurers, raised $2.5 million in seed funding. <\/span>MTech Capital<\/b> led the round and was joined by <\/span>B Capital<\/b>.<\/span><\/p>\n – <\/span>Nook<\/b><\/a>, an Austin-based crypto savings app, raised $2.5 million in funding. <\/span>Coinbase Ventures<\/b>, <\/span>defy.vc<\/b>, and <\/span>UDHC<\/b> led the round and were joined by angel investors.<\/span><\/p>\n – <\/span>KKR<\/b> agreed to acquire<\/span> Zenith Energy<\/b><\/a>, a Rivervale, Australia-based independent power producer company, from a consortium including <\/span>Pacific Equity Partner<\/b>s, <\/span>OPSEU Pension Trust<\/b>, and <\/span>Foresight Group<\/b>. Financial terms were not disclosed.<\/span><\/p>\n<\/div>\n This is the web version of Term Sheet, a daily newsletter on the biggest deals and dealmakers in venture capital and private equity. Sign up<\/a> for free.<\/p>\n
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