Contract review platform Spellbook raises $50m

Legal AI platform Spellbook has raised $50 million in a Series B funding round led by Silicon Valley investor Khosla Ventures, valuing the company at $350 million.

The fresh capital will support Spellbook’s expansion beyond contract review and into the wider field of transactional legal work - a market it estimates to be worth around $1 trillion. The company also plans to grow its go-to-market team and fine-tune its AI by drawing on real-time market data.

As well as Khosla - known for being the first company to invest in OpenAI in 2018 - other participants in the funding round include Threshold Ventures as well as existing backers Inovia Capital, Bling Capital, Moxxie Ventures, Path Ventures and Jean-Michel Lemieux.

On the up

Founded in 2022, Spellbook is best known for its Microsoft Word add-in, which uses generative AI to review, redline and draft contracts, as well as "Associate" - billed as the first AI agent for law when it launched last year - which automates tasks typically handled by junior lawyers.

The company says it has reviewed over 10 million contracts and is on track to triple revenue this year, now serving nearly 4,000 law firms and in-house legal teams across 80 countries - more than any comparable AI contract review product, it says.

It raised a $20 million Series A round in January last year.

Bigger picture

The raise follows Spellbook’s recent collaboration with Kennedys on an AI-powered training programme designed to teach junior lawyers practical drafting and review skills that risk disappearing as automation takes hold.

It also comes amid a red hot market for legal AI investment. Earlier this week, $5 billion-valued US platform Harvey announced €50 million in new funding from European PE house EQT to accelerate its global push, while Swedish rival Legora is reportedly seeking a $100 million raise at a $1.7 billion valuation.