Dealstack, a private equity-focused platform founded by former Kirkland & Ellis partner Joel Arnell and ex-Oaktree Capital investor Seb Lapinski, has gained $5.5m in an angel-heavy Seed funding round with investment from current and former senior professionals at Paul Weiss, others at Kirkland & Ellis, Latham & Watkins, KKR, CVC, TA Associates, and Goldman Sachs.
In March, Esther Chiang, who most recently was at Paul Hastings and also spent time at Kirkland & Ellis, launched SmartEsq, a startup designed to massively reduce legal costs for private equity (PE) fund formation.
In short, senior folks from top law firms are increasingly getting into developing tech products. It’s not an avalanche yet, but still, these are partner-level lawyers from firms taking on the legal tech founder journey. In Arnell’s case, he was at Linklaters, then a partner at Kirkland until 2019, then joined Triton Partners investment group, before starting Dealstack mid-way through 2022.
Dealstack explained that the fintech / legal tech platform automates important workflows, including valuation waterfalls, employee equity and ownership tracking, structure charts, and contract management, all within a single, structured platform, built specifically for private capital. The result: faster execution, real-time collaboration, and better data, producing significant time and cost savings, they added.
The duo behind the company added that in the two years since they started, over 30 PE firms have signed up, and 7 of the top 10 law firms by deal value have also become customers.
Arnell, co-founder and CEO, commented: ‘As M&A lawyers and investors, we’ve lived these inefficiencies first-hand. We built a platform designed specifically for private capital to automate the highly manual workflows that prevail. The broad backing from leading industry figures show we are on the right track.’
The team noted that: ‘The promise of AI has not translated into real world utility within the private capital industry. Data tenancy and security, coupled with concerns around hallucination and model specificity, have proved a near insurmountable block for even early adoption of this technology in private capital, where the high regulatory environment and complex problem space compound these issues.
‘The last-mile delivery of AI applications must be perfect. Generically trained models will never work in an industry built on private data and distinct working methods. Dealstack automates many of these operational tasks, giving time back to investors to concentrate on their core activity – investing.’
They added that Dealstack offers:
A unified private capital ontology which maps the legal, financial, and ownership relationships.
A single, auditable view of the legal truth.
The key to reliable AI-powered agentic workflows.
Is this a big deal? Well, as noted above, aside from the tech advances this is significant in terms of the founders’ previous careers. And in terms of the tech, it’s another example of PE becoming the target for improvement via software. For example, the other company mentioned above, SmartEsq (see here), explained to AL that it could provide a 75% reduction in legal costs for PE funds.
Both of these moves matter, as for some time PE had been seen as, how can we say……a bit unworried about the efficiency of its own operations. Now, clearly that’s changing. Congrats to the team at Dealstack.
You can find out more about the company here.
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Main pic: ex-Kirkland Partner Joel Arnell (left), and ex-Oaktree Capital investor Seb Lapinski (right).
