Updated: Leverton “consolidates operations from two European locations into one” followed by MRI Software acquisition
This story was updated at 14.10 on 1 August, see below.
Leverton has been acquired by MRI Software two months after cutting its circa 50 employee Berlin workforce in what CEO Abe Somani tells us was a strategic decision that allowed the former German-headquartered company to pursue its growth initiatives.
The acquisition, announced yesterday (31 July) will, Somani says, see Leverton turn its London office into a European centre of excellence. “In an effort to provide the best support for our European customers, we consolidated operations from two European locations into one center of excellence. The reduction of operations in Berlin was a strategic decision that allowed us to pursue our forward-looking growth initiatives and provide the best customer experience around the world. We are extremely grateful for the contribution that our past Berlin-based employees have made during prior phases in the development of the business,” Somani told Legal IT Insider.
However, we understand that Berlin accounted for around 80% of Leverton’s staff, and one person with knowledge of the situation said: “This is beyond redundancies: they fired the entire founding office. The word on the street in Berlin is that people aren’t terribly happy with Leverton.”
Leverton raised $11m in Series A funding only in July 2017, having raised $5.6m in seed funding in 2015, according to Crunchbase, and was known to be looking for further investment.
Its automated lease abstraction technology will find a natural home in MRI Software, which is a global leader in real estate software solutions. The company sought to assure the market yesterday that for Leverton clients, it will be “business as usual.” It said in a statement: “The company will continue to support customers in its other industries such as healthcare, insurance, legal, financial, as well as real estate. MRI champions an open and connected ecosystem enabled by its extensive and growing global partner network; it remains committed to offering choice in terms of integrating Leverton with third-party enterprise resource planning and property management technology solutions.”
Leverton, which was founded in 2012 and aside from London has offices in New York and New Delhi, said in the statement yesterday that it has more than 100 global corporate and investor clients, including JLL, Savills, RSM, Zurich Alternative Asset Management, and Danaher. Law firm clients were not mentioned.
The statement added: “With Leverton, organizations are able to more quickly and efficiently turn unstructured information in leases and other corporate and legal documents into data sets that can be mined for actionable insights, leading to better business decisions and improved operational efficiencies.”
“The acquisition of Leverton brings a true innovator and global PropTech leader into the MRI family, with expertise in the application of AI to real estate data collection, management, and analytics,” said Patrick Ghilani, MRI’s chief executive officer. “Going forward, we will incorporate AI-driven ‘Leverton intelligence’ into the very fabric of MRI’s DNA, enhancing our singular customer experience by enabling clients throughout the world to tap into data across the MRI ecosystem. The result: smarter business solutions that generate fresh and powerful insights.”
Prior to the acquisition, Leverton was an MRI partner for more than two years and is already used by several MRI clients as part of their integrated property management system, including Derwent London.
Leverton declined to disclose the value of the deal.
Update: In response to our story above Somani added: “The acquisition by MRI is a separate story and not connected to our restructuring. It doesn’t make sense for a tech start-up to have lots of offices and this is a positive story: one of the pioneers of legal technology has been acquired and continues to grow and scale. We all want to be encouraging to young people and show them that you can be acquired and be successful and that is the message that we’d like to send. We’re all happy by the outcome and motivated by it.”
With regard to the previous funding round, he added: “Clearly running through investment is normal for a fast-growing tech startup.”
A couple of people from the Berlin office are moving to London, according to Somani.