The US: Major legal IT funding announcements as kCura raises $125m and Casetext $7m in investment + Newly-merged Datacert and TyMetrix to become ELM Solutions
Associate Editor Caroline Hill reports…
In a fortnight of high value US legal tech funding announcements, Chicago-based ediscovery software company kCura has left a few open mouths with the disclosure that it has raised $125m in a first funding round, dwarfing the still sizeable $7m raised by Palo Alto’s free legal research website Casetext.
$ kCura, the developers of the ediscovery software Relativity, said at the start of February that it is taking on a long-term, minority investor for the first time with the huge $125 million capital injection from San Francisco-based ICONIQ Capital. ICONIQ Capital is described by Forbes as an “obscure Silicon Valley firm” headed by Divesh Makan, whose clients include Facebook.
kCura will remain privately owned and independent, and the funds will allow the company to raise their “level and pace of innovation within ediscovery” by investing significantly in people, technology, their community of users, and accelerating the build out of Relativity.
President & CEO of kCura, Andrew Sieja said: “Our industry is evolving rapidly—it’s no longer a boutique business—and remaining competitive will require an extensive amount of resources. Our customers want a single technology platform that offers best-of-breed technology in every phase of the e-discovery process, as well as for internal investigations and compliance. At the same time, they’re dealing with increasing volumes of electronic information, and need progressively smarter, easier ways to get a better understanding of that data. We want to continue delivering that for them.”
$ At Casetext, meanwhile, the $7 million funding round was led by Union Square Ventures, with participation from Formation 8, and former Thomson Reuters CEO Tom Glocer. This investment adds to the $1.8 million in seed funding the company secured in October 2013 from investors including SV Angel, Crosslink Capital, A-Grade Investments, Susa Ventures, Red Sea Ventures, and BoxGroup, among others.
Casetext, which was launched in 2013 to allow lawyers to share commentary linked to millions of cases and statutes on a free-to-use platform, will use this round of funding to expand its legal database and enhance its platform. It attracts over 250,000 users each month.
“We’re taking a totally different approach to legal research,” said Jake Heller, CEO and founder of Casetext. “The old way of doing things misses the most valuable source of legal knowledge: the legal community itself. Lawyers already share insight about the law publicly to demonstrate thought leadership and grow their reputation. By building the best platform to write commentary on the law, we’re able to collaborate with the legal community to create an insightful, free legal resource for lawyers and the public. And we’re disrupting an $8 billion legal research market in the process.”
$ In other news out of the US, the start of February saw enterprise legal management leaders Datacert and TyMetrix announce that the new name for their combined enterprise will be ELM Solutions. “We are not only the largest ELM vendor in the market, we also have the largest R&D budget, the most advanced technology platform, a global network of 70+ partners, and the backing of [parent company] Wolters Kluwer,” said Jim Tallman, executive vice president & general manager, ELM Solutions.
$ Finally, yesterday it was announced that Chicago-based Cumulus Data, has been acquired by Portland-based Zapproved Inc. The transaction was facilitated through an institutional investment totaling more than $20 million led by K1 Investment Management. Zapproved is adding staff and expanding its cloud technology offerings, including through acquisitions such as this. Legal Hold Pro, the award winning foundation of the Z-Discovery Suite, has been enhanced and integrated with Cumulus Data’s eCloud Collect, the technology behind Data Collect Pro. Data Collect Pro provides a cost-effective and user-friendly application for conducting targeted collections remotely and defensibly. Since this acquisition, Zapproved has added Digital Discovery Pro which provides hyper-fast, cost-effective processing software to pare down data sets to the most pertinent information. Kenyon Group served as the exclusive financial advisor to Cumulus Data and arranged this transaction.