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LegalOn Technologies, a Tokyo and San Francisco-based startup that uses AI to speed up contract reviews, has raised $50 million in a funding round led by the growth equity team at Goldman Sachs Alternatives.
The Series E round also attracted participation from U.S. and Japan-based venture capital firm World Innovation Lab and Japanese law firm Mori Hamada & Matsumoto, as well as Mizuho Bank and Shoko Chukin Bank, LegalOn said in a statement on Thursday. The round brought the startup’s total funding raised to $200 million, according to LegalOn.
LegalOn was founded in Japan in 2017 by former Mori Hamada lawyers Nozomu Tsunoda and Masataka Ogasawara. The company has developed an AI-powered contract review tool, which can identify legal risks, rank them by severity and make suggestions based on more than 50 attorney-drafted guidelines. LegalOn said the AI tool can reduce time needed for the traditionally manual process by up to 85%, while also improving accuracy. Deployed by more than 7,000 companies, its products also include a tool that tracks contract requests across multiple platforms, such as Slack and email, while managing progress.
LegalOn said it will use the fresh funding to develop agentic AI products and expand its presence in the U.S. and the U.K. The company on Thursday also announced a strategic partnership with OpenAI, the company behind the popular chatbot ChatGPT, to create AI agents focused on legal work. The collaboration will allow LegalOn to combine its proprietary legal data with the enterprise version of ChatGPT to improve corporate legal workflows, the startup said.
“From day one, we’ve focused on building solutions that help in-house legal teams move faster, reduce risk and drive greater business impact,” said Tsunoda, cofounder and Group CEO of LegalOn. “Collaborating with OpenAI puts us at the forefront of innovation and accelerates our mission to transform legal work with trustworthy AI, enabling us to bring even more advanced tools that meet the high standards our customers expect.”
LegalOn’s last fundraising was in 2022, when it secured ¥13.7 billion ($101 million at the time) in a Series D round led by Japanese billionaire Masayoshi Son’s SoftBank Vision Fund 2. Other investors of the round include billionaire Neil Shen’s venture capital firm HongShan Capital (formerly Sequoia China) and Goldman Sachs.
LegalOn is among the startups that’s using AI to revolutionize the legal industry, which remains heavily burdened by paperwork from contracts and court submissions to client communications. Other legaltech startups include San Francisco-headquartered Harvey AI, which last year joined the unicorn club after raising $100 million in a Series C round from Google Ventures, OpenAI, Kleiner Perkins and Sequoia Capital, among others.
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