In one of the legal technology industry’s largest-ever funding rounds, US crowdsourced legal research platform Casetext has closed a $12m Series B funding round in order to expand the capabilities of its AI-backed automated research assistant CARA and build up its platform and business.
The funding was led by Canvas Ventures, which has previously invested in technology powerhouses Siri and Evernote, with participation from prior Casetext investors Union Square Ventures, 8VC, and Red Sea Ventures, among others.
Casetext, which was founded in 2013 and raised $7m Series A Funding in 2015, is a freemium research platform for US litigators, who have access to the full library of federal and state law, as well as comments and case law reviews from other attorneys. The site now receives over one million unique users a month.
Contributors are vetted by the Casetext team but also graded by users, which means that the best content becomes more easily accessible. Casetext now has around 500,000 attorneys contributing to the site.
CARA, which stands for Case Analysis Research Assistant, uses AI and natural-language technologies to automate key legal research tasks. It represents the paid for, or premium side of Casetext and is where the San Francisco-based company is now investing money in order to improve CARA’s capabilities.
Casetext recently announced partnerships with leading law firms Quinn Emanuel, Fenwick & West, DLA Piper, Ogletree Deakins and Greenberg Traurig, among others, all of which are using CARA.
Speaking to Legal IT Insider, Casetext’s founder and CEO Jake Heller said: “We’ve been working on CARA for over two years and only released it seven months ago. We didn’t want to release something that didn’t add value and we pretty quickly got to the place where we’re confident releasing it to the world.”
CARA, which has been fed thousands of briefs from elite attorneys, is being used as a straightforward research tool to find relevant caselaw. Heller says: “If you drag and drop your brief, argument or a memo into CARA it will process it and upload and return for you all the cases that are highly relevant to but not contained in the documents.”
CARA is also being used when opposing counsel file a brief and Heller says: “If you give the brief to CARA it will locate all the cases opposing counsel left out by accident or because they’re the kind of cases they don’t want you to see.”
Investment presents a number of risks for startups, with many shying away from bringing in even more modest levels of funding. However, Casetext is attempting to shake up the $21 billion market for legal and regulatory information on a large scale and Heller told Legal IT Insider: “I think this is the right call for us. We know that there are massive hurdles in this space to build something truly amazing.
“To do well in this space we need the content to be good, the technology to be world class and in an order of magnitude that’s better than anything before and the support and messaging done really well. This is a classic case for why you bring in great external investors.”
Rebecca Lynn, general partner at Canvas Ventures, will join the Casetext board. She said: “Having been a lawyer before becoming a venture capitalist, I can say with confidence the speed and scale of Casetext’s disruption of the legal research industry is profound.
“I think Casetext will be indispensable for lawyers, from associates to partners. Litigation is a battle and CARA is a lawyer’s best weapon.”