Silicon Valley firm Khosla Ventures makes a rare Seattle investment, leading $11M round for Lexion

Lexion CEO Gaurav Oberoi. (Lexion photo)

Lexion is on the move.

The Seattle-based startup that helps legal teams use AI to search contracts has quadrupled revenue and gained 50 customers in the past four months, including brands like Outreach, Blue Nile, OfferUp, and others.

Now the company is raising more money to accelerate growth and is announcing a $ 11 million Series A round led by Khosla Ventures. It is one of the few startups in the Seattle area to receive funding from Khosla, a top Silicon Valley company that has backed giants like DoorDash, Okta, Opendoor, Square and others including OpenAI.

Lexion, which emerged from the Allen Institute for Artificial Intelligence in Seattle, uses algorithms to automatically analyze contracts and display relevant information. It creates an organized searchable repository and various reports.

The idea is to help legal teams who are currently using a mishmash of tools like Dropbox and Excel. Lexion can quickly answer questions either on its platform or in other apps such as Slack or Salesforce, for example whether a contract is active or whether it contains termination clauses.

The 30-person company is part of a fast-growing segment called Contract Lifecycle Management Systems (CLMs) that includes heavyweights like the Seattle area unicorn Icertis and a few others.

Lexion focuses on midsize smaller businesses that have a handful of legal professionals whose time could better be spent on something other than document sifting. The simplicity, the fast onboarding process and the state-of-the-art natural language processing technology give Lexion a competitive advantage, according to CEO Gaurav Oberoi.

“It will allow attorneys to do what they thought they should do after graduating from law school as opposed to having a lot of administrative and subordinate tasks that take up a large chunk of their time week after week,” said Lexion CEO Gaurav Oberoi.

Lexion plans to use the fresh money to go beyond reporting into the workflow, help companies streamline contract approval, and provide a dashboard that legal teams can use to manage the process.

“This combination of cutting-edge technology with ease of use and practical application is exactly how the value of AI is being realized in companies, and that’s why we believe Lexion has a distinct advantage in this area,” Vinod Khosla said in a statement. Khosla founded Sun Microsystems and founded his VC company in 2004.

Lexion founders Emad Elwany, Gaurav Oberoi and James Baird. (Lexion photo).

Oberoi founded Lexion with Emad Elwany and James Baird. Oberoi previously helped build BillMonk, an invoice splitting app that existed before Splitwise, and also created Precision Polling, an automated polling startup that was later bought by SurveyMonkey. Elwany previously worked as an artificial intelligence engineer at Microsoft, and Baird is an engineer who came from the web development company Pancake Labs.

Legal tech startups like Lexion are getting tailwind from the pandemic that has accelerated digital adoption in the legal industry with the shift to remote work. Clearbrief is another newer startup based in Seattle that also uses AI, but for legal writing analysis.

CB Insights has ranked Lexion as the most promising AI legal technology startup for the past two years.

Previously, Lexion had raised a $ 4.2 million seed round in 2019 from Madrona Venture Group and law firm Wilson Sonsini, Goodrich and Rosati, both of whom were re-entering the Series A round. Khosla Ventures’ Kanu Gulati will join Lexion’s board of directors as a result of the new funding. Total funding to date is $ 15.2 million.

Other AI2 spinouts include (acquired by Baidu in 2017), (acquired by Apple in 2020), Why Labs, Blue Canoe, WellSaid Labs, and Panda AI.

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