SoftBank-backed LegalOn lands $50M to streamline legal workflows with AI

The traditional process of contract review often becomes a laborious task for legal teams, as lawyers are required to navigate complex language, identify risks, and interpret legal jargon. Recognizing this widespread challenge, Tokyo-based LegalOn Technologies has capitalized on the demand for efficiency in this sector. Their AI-powered contract review software is now employed by 7,000 organizations across Japan, the U.S., and the U.K., establishing LegalOn as a leader in the Japanese market, with 25% of public companies utilizing their platform. LegalOn’s flagship tool, Review, leverages AI to pinpoint risks and propose edits tailored to each client's legal standards, significantly reducing review times by up to 85% while enhancing accuracy and quality. Despite its accomplishments, the company is not resting on its laurels; LegalOn has successfully secured $50 million in funding to expand its suite of AI agent tools. This Series C funding round, led by Goldman Sachs’ growth equity fund, included investments from existing backer World Innovation Lab (WiL) as well as new stakeholders such as the law firm Mori Hamada & Matsumoto, Mizuho Bank, and Shoko Chukin Bank. The fresh capital will primarily support the development of additional AI agent products, but LegalOn is also focusing on boosting its market presence in the U.S. and U.K., where it has witnessed a fourfold increase in business in the past year. Founded in 2017 by ex-corporate lawyers Nozomu Tsunoda and Masataka Ogasawara, LegalOn aims to simplify various time-consuming tasks associated with contract review, including managing legal requests and automating contract administration. According to Daniel Lewis, Global CEO of LegalOn, the company differentiates itself from other legal tech startups by grounding its solutions in attorney-drafted, expert legal content. This foundational approach ensures that contract reviews are aligned with established legal standards, resulting in outputs that are accurate, consistent, and practical for legal teams. LegalOn boasts over 50 attorney-created playbooks and provides seamless integration into existing workflows, making its solutions ready to use from day one. In addition to its core offerings, LegalOn recently unveiled Matter Management, a tool designed to help legal teams monitor contract requests, designate responsibilities, link matters to relevant personnel and documents, and facilitate collaboration across departments. Furthermore, the company has formed a non-equity technical partnership with OpenAI, enabling access to advanced language models developed by the ChatGPT creator. Lewis described this collaboration as a way to enhance their AI capabilities while leveraging their proprietary legal knowledge and expertise. The surge of interest in AI technology is creating significant momentum for legal tech startups globally. For example, Harvey AI raised $300 million in Series E funding in June, reaching a valuation of $5 billion, while Clio secured a similar amount last year, achieving a valuation of $3 billion. However, Lewis believes that AI will not replace lawyers, emphasizing that the technology is not yet at that level and that the role of lawyers remains crucial. "Lawyers are still in the driver’s seat. The aspects of legal work that require human oversight, judgment, and editing are where the real value lies, and those lawyers who embrace this responsibility are benefiting the most from AI advancements," he stated. With this latest funding round, LegalOn has now raised over $200 million, backed by prominent investors including SoftBank Vision Fund, HSG (formerly Sequoia Capital China), Japanese venture capital firm JAFCO, and MUFG Bank.