This is a weekly feature that runs down the week鈥檚 top 10 announced funding rounds in the U.S. Check out last week鈥檚 biggest funding deal roundup here.

The pace of large-scale dealmaking picked up some this week, led by 鈥檚 disclosure that it raised another $10 billion to add to its record-setting megaround announced last month. Other big financings went to startups and growth-stage companies in sectors including defense tech, enterprise AI, autonomy and even laundry.

1. , $10B, foundational AI: OpenAI $10 billion in additional funding for its record-setting megaround announced in late February, reportedly bringing the total fundraise to the San Francisco-based company to over $120 billion. Backers in this latest financing include , , , and .

2. , $2B, defense tech: San Diego-based defense tech unicorn Shield AI said it secured $2 billion at a $12.7 billion valuation. The round consists of $1.5 billion in Series G funding led by and along with $500 million in preferred equity financing backed by . Part of the proceeds will help pay for the planned acquisition of , a defense software company whose technology is used to train pilots and test advanced aircraft and autonomous systems.

3. , $350M, transportation safety: Cambridge Mobile Telematics, a telematics and AI company focused on enabling safer mobility, picked up $350 million in a new financing聽 led by and . Founded in 2010, the Cambridge, Massachusetts-based company has raised over $850 million to date, per SA国际传媒 .

4. (tied) , $200M, legal tech: Harvey, the fast-growing provider of AI-enabled tools for law firms and in-house legal teams, closed on $200 million in fresh financing at an $11 billion valuation. and led the round, which brings total funding to 4-year-old San Francisco-based Harvey to around $1.2 billion.

4. (tied) , $200M, healthcare: eMed, a provider of GLP-1 programs for employers that counts as chief wellness officer and backer, said it raised $200 million in new funding. led the round, which set a $2 billion plus valuation for the Miami-based company.

6. , $170M, satellite tech: Xona secured a $170 million Series C round led by . The funds will go to scaling satellite production for a planned constellation of next-generation navigation satellites. Founded in 2019, Burlingame, California-based Xona has raised over $320 million to date.

7. , $140M, laundry tech: Cents, a provider of software and payments technology for the laundry industry, secured $140 million in Series C funding led by . The New York-based company said the round represents 鈥渢he largest single software investment in the laundry vertical to date.鈥�

8. , $125M, AI health tools: Palo Alto, California-based Qualified Health, developer of an enterprise AI platform for health systems, locked up $125 million in Series B financing led by .

9. (tied) , $110M, data observability: Dash0, an agentic observability platform, announced it closed on $110 million in Series B funding led by . Founded in 2023, the New York-based company has raised over $154 million to date.

9 (tied) , $110M, drones: Huntsville, Alabama-based Performance Drone Works, a startup that designs, engineers and manufactures drones for defense and law enforcement, secured over $110 million in Series B funding led by .

Methodology

We tracked the largest announced rounds in the SA国际传媒 database that were raised by U.S.-based companies for the period of March 21-27. Although most announced rounds are represented in the database, there could be a small time lag as some rounds are reported late in the week.

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The valuation is a big jump from the $1.8 billion Legora achieved just last October, when it raised The company has now raised a total of $816 million since its inception.

Founded in 2023, Stockholm-based Legora says it plans to use the new capital to accelerate its expansion across the U.S. It set up shop in New York one year ago and is now opening new offices in Houston and Chicago. It has over 800 customers across 50 markets.

led the round, which also included participation from existing backers , , , , , and , as well as a slew of new investors, including , and 1.

Venture funding for legal tech startups reached a record high in 2025, driven by investor enthusiasm for AI鈥檚 potential to automate the legal profession. Per SA国际传媒 , companies in the legal and legal technology sectors raised $4.08 billion in seed- through growth-stage funding in 2025. That鈥檚 an impressive 77.4% increase from the $2.3 billion raised by legal tech startups in 2024.

Other startups in the industry that have closed on sizable fundings over the past year include:

• : A provider of legal practice management software, Filevine announced in September that it had closed on two previously undisclosed rounds totaling $400 million. led the first round and, interestingly, joined Accel and to co-lead the second.
• : San Francisco-based Harvey, a provider of AI tools for legal professionals, closed on four separate funding rounds in 2025, including two rounds of $300 million each. To date, the 3-year-old company has raised more than $1 billion.
• : Toronto-based Blue J, developer of a GenAI tax research platform that counts legal professionals among its core users, raised $122 million in an August Series D financing led by and .
• : Palo Alto, California-based Eudia, which develops an intelligence platform for Fortune 500 legal teams, landed up to $105 million in a Series A financing led by .

鈥淥ver the past year, the pace of adoption in the U.S. has exceeded our expectations, as leading firms and in-house teams move decisively from experimentation to embedding AI across their organisations,鈥� , CEO and co-founder of Legora, said in a press release. 鈥淭his funding enables us to accelerate our U.S. growth 鈥� investing in talent and infrastructure, strengthening our presence in key markets, and ensuring we can support customers on the ground as they integrate AI into their core workflows.鈥�

The company expects to open more offices in the U.S. this year.

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A host of interesting, under-the-radar recently funded startups caught our attention in the past month, including one that鈥檚 developing nuclear-waste generated electricity on the moon, another that aims to use AI to extract business intelligence from enterprise contracts, and a shoebox-picking warehouse robot. Let鈥檚 take a closer look.

$55M to turn contracts into business intelligence

AI-driven contract intelligence platform said last month that it raised $55 million in a Series B round led by existing investor , with participation from , , and .

The funding for the San Francisco-based company comes amid record-breaking funding for legal tech startups, particularly those that apply AI-driven automation to the notoriously paperwork-heavy profession. All told, venture funding to legal tech startups in 2025 nearly doubled year over year to more than $4 billion, per SA国际传媒 data.

Ivo itself has now raised $77.2 million from investors, . Its latest funding comes as in-house legal teams face mounting pressure from rising contract volumes and growing compliance demands.

Even as contracts increasingly serve as the backbone of revenue, vendor relationships and risk management, much of the data inside those agreements remains locked in PDFs and legacy systems, which are difficult to search or analyze without manual review.

Ivo鈥檚 platform automates contract review and transforms agreements into structured, searchable data. Its review product uses lawyer-built playbooks to standardize positions and flag deviations, with customers reporting time savings of up to 75% compared to manual review, per the company. Its intelligence layer also reportedly allows teams to surface obligations, renewal terms and risk exposure across entire contract libraries in seconds.

Since its previous funding round, Ivo says it has grown annual recurring revenue by 500%, increased its total customer count by 134%, and expanded adoption within the Fortune 500 by 250%. Its customers include , , , and .

鈥淥ur goal has always been to make interacting with contracts fast, accurate, and enjoyable,鈥� CEO and co-founder said in a statement. 鈥淓very key relationship in a business is defined by an agreement, yet most organizations struggle to extract the insights inside them. Our focus is to give in-house teams a trustworthy solution that helps them work faster and gives them visibility into their contracts that was previously impossible.鈥�

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$10M for warehouse robots, including one that picks shoeboxes

Amid record robotics investment, we perhaps shouldn鈥檛 be too surprised to see some very specialized bots get funding.

One is from , a Polish warehouse robotics company that last month raised a $10 million Series B extension led by . Along with its new funding, the Warsaw-based company unveiled its Shoebox Picker robot, designed to 鈥渞eliably pick two-piece, unsealed shoeboxes.鈥� That might sound like a niche task, but the company said shoeboxes account for up to 20% of SKUs in U.S. fashion e-commerce, yet have long resisted automation.

The Shoebox Picker can pick up to 450 units per hour when it鈥檚 only handling shoeboxes, and up to 600 units per hour for mixed bins, per the company. It can handle more than 98% of the shoeboxes on the market, according to Nomagic.

Nomagic鈥檚 vision is 鈥渢o bring physical AI into the heart of warehouse and logistics operations, where intelligent, autonomous systems can finally bridge the gap between digital optimization and real鈥憌orld execution,鈥� CEO and co-founder said in the funding announcement.

The company was founded in 2017 and has raised $84.6 million to date, .

Venture funding to robotics-related startups overall totaled nearly $14 billion last year, per SA国际传媒 data. That鈥檚 a 70% increase over 2024 and eclipses even the peak funding year of 2021.

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$5M to replace synthetic dyes with plant-based alternatives

, a startup developing plant-based color technology, raised $5 million in a pre-Series A round led by 鈥� Blue Ocean 2 fund, with participation from and .

The Cambridge, U.K.-based startup is tackling one of the fashion and chemical industries鈥� dirtiest secrets: synthetic dyes. An stems from textile dyeing and fabric finishing treatments.

Sparxell鈥檚 funding seems timely, as regulators globally are tightening scrutiny of chemical substances. The has with restrictions on intentionally added microplastics, and policymakers are weighing broader bans on PFAS 鈥渇orever chemicals.鈥� In the U.S., the has also been in food and consumer products.

Spun out of the , Sparxell aims to replace petroleum-based pigments and heavy metals with wood pulp-derived coloring. The company says that arranging cellulose crystals to reflect specific wavelengths of light produces 100% plant-based pigments, glitters and inks designed as direct replacements for conventional dyes.

The startup says its process can cut water use by up to 90% compared to traditional dyeing methods and eliminate microplastics and toxic runoff. Unlike synthetic dyes, Sparxell鈥檚 cellulose-based pigments are also biodegradable, per the company.

鈥淥ur technology isn’t just an alternative 鈥� it is here to stay because it delivers superior performance due to its nature-inspired features. This funding takes us from proof of concept to production and commercial launches,鈥� CEO and founder said in a statement. 鈥淲e’re at an inflexion point. Brands are under pressure to eliminate synthetic toxins from their supply chains.鈥�

Founded in 2022, Sparxell has now raised $10.2 million, . The new funding will help it scale from pilot projects to tonne-scale manufacturing by 2026, per the company.

Apparel-related venture funding totaled about $1.5 billion globally last year and in 2024, per SA国际传媒 data, down significantly from the peak year of 2021 when it totaled $9.2 billion.

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$2.6M for AI-driven M&A deal-sourcing

Singapore-based , an M&A sourcing platform for corporations and high-growth startups, recently raised $2.6 million in a funding round led by , with participation from angel investors.

The startup is targeting one of the most relationship-driven corners of corporate strategy: deal origination. While acquisitions have become a key growth lever for companies of all sizes, sourcing targets, especially in the mid-market and sub-$70 million range, remains slow, opaque and heavily dependent on banker networks and in-market listings.

GrowthPal says its AI-driven platform acts as an 鈥淢&A copilot鈥� that translates a buyer鈥檚 strategic objective 鈥� say, entering a new geography or acquiring a specific capability 鈥� into a structured acquisition thesis. AI agents then scan a database of more than 4 million technology companies, analyzing signals including hiring trends, funding history, web activity and public filings to surface high-fit, often off-market targets.

鈥淢&A sourcing is where most time and effort is wasted, especially for smaller and mid-market deals,鈥� , co-founder and CEO of GrowthPal, said in a statement. 鈥淭eams spend weeks researching, filtering, and chasing opportunities that never go anywhere. We built GrowthPal to help buyers focus only on high-intent, high-fit targets and move from mandate to meaningful conversations far faster.鈥�

GrowthPal, which has raised $4 million total, , says it has already supported 42 completed transactions and facilitated more than 210 letter-of-intent-stage conversations across North America, Europe, Asia and Latin America. Its clients reportedly span large enterprises, PE-backed firms and growth-stage startups across SaaS, fintech, IT services and other sectors.

In one case, the company says, a single client closed seven acquisitions in 18 months using the platform.

Its funding seems prescient: There were more than 2,300 M&A deals globally involving venture-backed startups last year, per SA国际传媒 data, up only slightly from the year prior, but insiders who spoke with SA国际传媒 News said they expect strategic acquisitions for talent and technology to surge this year.

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$411K to generate energy on the moon

Talk about a moonshot.

, a Latvia-based startup, this month said it has raised 鈧�350,000, or about $411,000, in pre-seed funding to generate electricity on the moon.

The company said the funding was led by and angel investor . Along with the equity round, Deep Space says it secured another 鈧�580,000 (about $682,000) in public contracts and grants by the , and the Latvian government.

The company aims to develop a novel generator based on radioisotopes 鈥斅爉aterials derived from nuclear waste that generate energy through natural decay 鈥斅爐o power moon surface exploration and for military satellite reconnaissance.

鈥淥ur technology, which has already been validated in the laboratory, has several applications across the defence and space sectors,鈥� Deep Space CEO and founder said in a statement. 鈥淔irst, we鈥檙e developing an auxiliary energy source to enhance the resilience of strategic satellites. It provides the redundancy of satellite power systems by supplying backup power that does not depend on solar energy, making it crucial for high-value military reconnaissance assets.鈥�

艩膷epanskis noted in the statement that while Deep Space鈥檚 technology wouldn鈥檛 be used for weaponry, the Russia-Ukraine war was a motivating factor for its development. That became even clearer last year, when Ukraine lost its beachhead in Russia鈥檚 Kursk Oblast as the U.S. .

鈥淎s Europe is trying to become more independent, it is imperative to produce satellites with advanced capabilities on our own,鈥� 艩膷epanskis said. 鈥淥ur technology provides an auxiliary energy source for satellites, which makes them more resilient to non-kinetic attacks and malfunctions.鈥�

Venture funding to space- and defense-related technologies, which often overlap, soared last year. Global funding to space tech totaled $14.2 billion in 2025 鈥� more than double the annual totals in 2023 and 2024 鈥� per SA国际传媒 data. Funding recipients included a mix of defense tech, satellite and rocket developers, and startups finding innovative use cases for geospatial data.

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Today, it鈥檚 not enough to disrupt the market 鈥� you have to anticipate the rule-set that will govern it.

Investors are shifting gears. After a decade of 鈥渕ove fast and break things,鈥� they鈥檙e asking: Who built the compliance engine before the crash? Because the truth is, regulation has become a form of alpha 鈥� a competitive advantage for startups that think of law not as a hurdle, but as a moat.

The new era of smart compliance

The startup landscape has changed. High-profile failures 鈥� from crypto exchanges to wild valuations in fintech and AI 鈥� taught us that the regulatory cost of growth can be massive. Today鈥檚 investors and founders alike expect legal strategy from day one, not as an afterthought.

Consider the RegTech market: projects it will swell to about $70.64 billion by 2030, growing at a compound annual rate of roughly 23%. predicts growth to $70.8 billion by 2033. The message: Companies are no longer asking if they need compliance automation and legal-engineering infrastructure. They鈥檙e asking when they can monetize it.

So when a startup designs its product around KYC, AML, data-protection or licensing from the outset, it鈥檚 not just avoiding risk 鈥� it鈥檚 building a moat others will struggle to cross. For founders, regulation isn鈥檛 just the cost of entry anymore 鈥� it鈥檚 the cost of exit-edge.

When the law becomes a moat

There are former unicorns, and there are regulation-ready unicorns. The difference hinges on when they built their compliance architecture, hired legal engineers and treated regulation as product.

Take payment infrastructure: built , as Stripe鈥檚 PCI Level 1 certification and multijurisdiction licenses (U.S. money-transmitter, EU/UK e-money) enabled it to integrate cleanly with Pay, power 鈥檚 native payments, and 鈥� per a 2023 announcement 鈥� expand its role processing payments for .

Or look at crypto: , publishing its U.S. money-transmitter licenses and securing New York鈥檚 BitLicense in 2017. Its 2021 SEC S-1 repeatedly frames regulatory compliance and licensing as fundamental to the business.

In insurtech, from the outset, hired senior insurance veterans (e.g., former executive ) and, per its S-1 and subsequent filings, , operationalizing the 50-state regulatory landscape rather than trying to route around it.

These examples show a pattern: When compliance is built in from the start, the cost of scaling drops and competitors face much higher entry bars. Regulation becomes a moat 鈥� not a burden.

The rise of 鈥榣egal engineering鈥�

Welcome to the era of the legal engineer. The traditional model (sign contract, then lawyer reads, then flagged risk) is being replaced by code, automation and internal teams who speak both product and law.

Startups such as built cap-table software that includes 鈥�,鈥� allowing it to embed governance and securities-law readiness into the product nature of equity management.

(e.g., Section 1033) by building features such as data transparency messaging and consent-capture into its API stack 鈥� indicating a clear regulatory-first posture in its product roadmap.

And what鈥檚 happening in AI? Founders are hiring general counsels on day one to forecast imminent regimes 鈥� privacy law (GDPR, CCPA), AI transparency bills, emerging algorithms-as-infrastructure regulation.

The startup battle isn鈥檛 simply product vs. product anymore 鈥� it鈥檚 regulatory architecture vs. regulatory architecture.

Reports back this up: One credible industry estimate shows . In short: Startups that solve compliance at scale are building infrastructure for everyone else to rent. That鈥檚 platform-level potential.

Investors are taking note

Regulation-ready startups aren鈥檛 just surviving 鈥� they鈥檙e attracting smarter capital. Venture funds now assess regulatory maturity, legal runway and governance readiness early on. A startup that can show it isn鈥檛 鈥渨aiting to deal with compliance鈥� but designed it, has a valuation edge.

SA国际传媒 data shows global startup funding reached $91 billion in Q2 2025, up 11% year over year. While not all of that is focused on law or compliance, the trend signals that smart investors are buried deeper in risk assessment and governance. Legal tech funding is accelerating, too: the sector recently topped $2.4 billion in venture funding this year, an all-time high.

Funds are no longer only assessing TAM or go-to-market speed; they鈥檙e asking: 鈥淲hat鈥檚 the regulatory runway? Who owns risk? Who built the compliance pipeline?鈥� Because in sectors like fintech, climate tech, health tech and AI, the fastest growth path is often the one that avoids the enforcement arm.

The future: law as competitive advantage

Let鈥檚 zoom out for a moment. We鈥檙e moving into a world where regulation isn鈥檛 a ceiling 鈥� it鈥檚 scaffolding. It defines markets, enables scaling and filters winners from pretenders. Founders who see law as a source of architecture, not as chewing-gum-on-the-shoe, will be the ones writing the playbook.

Think about AI: Startups that design for regulatory change (data-provenance, audit trails, rights management) are already positioning for the future.

Think about climate tech: Companies that can navigate evolving carbon-credit regimes or ESG disclosure laws are building invisible advantages.

Think about fintech: Those that mastered licensing, KYC/AML, consumer-data flows early are the backbone of infrastructure.

The next wave of unicorns won鈥檛 just have better tech 鈥� they鈥檒l have truly infinitely better legal DNA. They won鈥檛 just disrupt a market; they鈥檒l help write the rules of the market before they scale.

Because in this new era, regulation isn鈥檛 a deadweight 鈥� it鈥檚 a launchpad.

is the chief strategy officer for. He holds a law degree and has taught entrepreneurship at and the, and was elected to Fastcase 50, recognizing the top 50 legal innovators in the world. His writing has been featured in,,,,,,, and many other publications. He was nominated for a Pulitzer Prize .

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The financing comes nearly one year after EvenUp announced a $135 million Series D at a valuation of more than $1 billion. In total, the San Francisco-based startup has raised $385 million in funding since its 2019 inception 鈥� closing four rounds since 2023.

Repeat backer led the startup鈥檚 latest raise, which also included participation from 鈥� the venture capital arm of , which owns 鈥� as well as , , , , , and .

EvenUp鈥檚 platform is powered by an AI model that is trained on hundreds of thousands of injury cases, medical records and internal legal knowledge. The platform helps with document generation, and case and negotiation preparation.

鈥淟egal AI is no longer a side bet; it鈥檚 becoming the backbone of personal injury law,鈥� said , CEO and co-founder of EvenUp, in a release. He said that in the past six months alone, volume on the company鈥檚 platform nearly doubled to 10,000 cases per week.

Venture funding to legal tech startups has already hit a record high in 2025, driven by investor enthusiasm for AI鈥檚 potential to bring more automation to the legal profession. On Sept. 23, , a provider of legal practice management software, that it closed on two previously undisclosed rounds totaling $400 million. led the first round and joined and to co-lead the second.

Per SA国际传媒 , companies in the legal and legal technology sectors have raised just over $2.5 billion as of early October in seed through growth-stage funding. With three months left in the year, it鈥檚 already the highest annual total on record.

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Per SA国际传媒 , companies in the legal and legal technology sectors have raised just over $2.4 billion so far in 2025 in seed through growth-stage funding. With over three months left in the year, it鈥檚 already the highest annual total on record.

Filevine snags $400M

A giant funding announcement this week played a big role in pushing the totals higher. , a provider of legal practice management software, Tuesday that it closed on two previously undisclosed rounds totaling $400 million 1. led the first round and joined and to co-lead the second.

Founded in 2014, Salt Lake City-based Filevine has expanded its platform over the years to cover more tasks for legal practices. Use cases touted on its website include time tracking, billing, case management software and secure document management, among others.

Filevine plans to use the funds in part to continue expanding its AI capabilities. The company said it counts nearly 6,000 customers and 100,000 users.

Other big fundraisers, and plenty of seed deals too

Several other startups have also closed on sizable funding this year, including:

• : San Francisco-based Harvey, the fast-growing provider of AI tools for legal professionals, closed on two rounds of $300 million each this year. To date, the 3-year-old company has raised more than $800 million.
• : Toronto-based Blue J, developer of a GenAI tax research platform that counts legal professionals among its core users, raised $122 million in an August Series D financing led by and .
• : Palo Alto, California-based Eudia, which develops an intelligence platform for Fortune 500 legal teams, landed up to $105 million in a Series A financing led by .

Notably, however, the boom in legal tech venture funding isn鈥檛 only about big rounds for prominent unicorns. The intersection of AI and legal work is one of the more active areas for seed funding, a trend we first observed last year and that has continued into 2025 as well.

Nothing mysterious here

For those seeking an explanation for why legal tech funding is on the rise, there is an obvious one that comes to the fore.

In essence: Much legal work is boring and repetitive, which makes it well-suited to offload more tasks to AI. In fact, among all professions impacted by artificial intelligence, legal work is expected to be one of the most affected by automation.

In one oft-cited , analysts estimated that an astounding 44% of legal work could eventually be automated. AI-enabled software will be taking on much of this workload.

On another side note, in addition to being repetitive, legal work also tends to be expensive, as anyone who has hired a lawyer can probably attest. While it remains to be seen whether AI will reduce the cost of legal services, it should at least free up time for lawyers and support staff to put their billable hours to the most productive use.

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Legal tech is hot right now. That鈥檚 because generative AI is rooted in text, and few industries are as text-focused as legal. Unsurprisingly, the legal world is buzzing.

Of course there’s also a lot of anxiety. GenAI threatens to automate tasks that once justified steep hourly rates anywhere from $500 to $1,500. Legal careers, long considered stable and high-status, suddenly feel vulnerable to disruption. Try asking ChatGPT a basic legal question and you鈥檒l quickly see why the anxiety is real. But there’s also excitement. For the first time, lawyers can draft, review and research at unprecedented speed. It鈥檚 like giving every associate a jetpack. The gold rush is on.

In 2024 alone, legal tech startups raised $2.2 billion globally, according to SA国际传媒 data. If you’re building in this space, the market heat is at the same time as validating as it is intoxicating.

But here鈥檚 what the pitch decks don鈥檛 tell you about being the founder at the crest of a hype cycle.

A sea change

Back in 2019, selling legal tech products required educating your customers first. Once, before pitching our legal AI and automation software to a major insurer鈥檚 management committee, I was told, 鈥淎dd a slide explaining what legal tech is. They have no idea.鈥�

For years, that slide became our most-used asset. It opened doors, built trust and educated skeptical buyers. But it was slow and methodical. Partners would nod politely while we explained that our AI software could draft documents or flag compliance risks more quickly than their colleagues could. The sales cycle averaged around eight months, going up to years, the industry norm at the time.

Fast-forward to 2025, and partners at top law firms will buy a legal tech product after a single demo, because the once speculative notion that 鈥渉alf of what my team does now could be done by AI鈥� has suddenly become the accepted wisdom.

The entire legal industry has gone from 鈥淲hat is AI?鈥� to 鈥淲e need AI yesterday鈥� in just a few years. This has been particularly interesting to observe in an industry as storied with tradition and continuity as law.

The utilitarian nature of AI technology means that anyone can make a GPT wrapped in a nice UI, so expect competitors to emerge weekly when you鈥檙e operating in a hyped sector.

From Big Law incumbents to three-person teams pitching your exact product, challenges to your market position can come from anywhere these days. There will be a deluge of funding announcements, feature launches, strategic hires and M&A deals as everyone tries to be the loudest player in the game.

Ignore the noise

The key is to ignore the noise and focus on speed, which might already feel like a tired adage in the AI era, but it remains essential to success.

Say 鈥測es鈥� more than you explain, accept imperfect customers, awkward use cases and messy implementations.

Keep an eye on your runway, but this is the time to make one-year bets, not five-year plans. As bluntly put it on the 20VC podcast: Either you ship fast and stretch the truth, or you wait for LLMs to catch up and risk irrelevance.

After seven years of building through the trough and crest of the legal tech cycle, the industry transformation I鈥檝e advocated for is now front-page news. The wave I caught with the 鈥淲hat is Legal Tech?鈥� slide turned into a tsunami that is reshaping how million-dollar law firms operate.

Keep your perspective

Even if it feels impossible at times, make sure to zoom out regularly to avoid getting sucked into the hype maelstrom. Find trusted advisers who have seen these cycles start and die before. Your board should be a source of clarity amidst the whirlwind of hot takes.

Finally, be grateful that you actually caught the wave. It can be intimidating, but when the focus is on your industry you get to build your company while the world watches, meaning doors that are usually locked shut will be wide open for a limited time. My advice is to build something that matters for when the hype dies, because it always does.

is the CEO and co-founder of , the legal automation platform combining AI with workflows for law firms and corporate legal teams. A former lawyer at and , Grupp transitioned from international litigation to entrepreneurship, founding (acquired by Persona Service AG, 2017) and Lexalgo (acquired by Bryter, 2018). Bryter has raised 鈧�90 million and serves clients including , , and . Grupp also lectures on legal tech and innovation at and is a thought leader on the intersection of law and technology.

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On July 1, Canada-based legal software company revealed its plans to acquire Spain鈥檚 from for $1 billion. And, 鈥� which has been on a buying spree as of late 鈥� announced its intent to acquire , an AI-native email app.

Clio plans to use cash and stock to fund its purchase of vLex. In , Clio CEO said the buy is an example of Clio 鈥渓aying the foundation for the first and only cloud-based, AI-powered platform that seamlessly connects the business and practice of law.鈥�

Founded in 2008, Clio in the past described itself as 鈥渢he operating system for law firms.鈥� Its software helps law firms automate processes such as client intake, accounting and document management, among other things. It was valued at $3 billion in July 2024 when it raised $900 million in a Series F funding round led by .

As Clio faces greater competition from the likes of 3-year-old startup , which in June raised at a $5 billion valuation, it is clearly trying to get ahead in the legaltech AI race. In his blog post, Newton said: 鈥淣ow, with our acquisition of vLex, we鈥檙e bringing even more to Clio, including extensive legal research and the industry-leading AI known as Vincent.鈥�

Per SA国际传媒 data, Clio鈥檚 planned purchase of vLex so far in 2025 so far.

Grammarly makes another move

For its part, San Francisco-based Grammarly said its purchase of Superhuman is 鈥減art of the company鈥檚 move to become an AI productivity suite.鈥� According to a spokesperson, with the acquisition Grammarly 鈥渋s bringing agentic AI directly to the inbox.鈥澛� It follows the company鈥檚 January acquisition of , a maker of AI productivity tools.

In a statement, Grammarly CEO , said the buys are in line with the company鈥檚 plans to bring AI 鈥渄irectly to users everywhere they work.鈥�

He added: 鈥淓mail isn鈥檛 just another app; it鈥檚 where professionals spend significant portions of their day, and it鈥檚 the perfect staging ground for orchestrating multiple AI agents simultaneously.鈥�

The purchase shouldn鈥檛 come as a big surprise. When Grammarly announced in late May that it had secured $1 billion in funding from longtime investor , the company said it planned to use its new capital 鈥渢o scale sales and marketing and for strategic acquisitions.鈥�

When it comes to other unicorns making acquisitions in 2025, the three largest deals involved AI companies so far this year are:

• in a deal that valued at $33 billion;
• for $6.5 billion; and
• for $3 billion.

Overall, there have been 181 acquisitions announced by unicorns in 2025, according to SA国际传媒 data.

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Thousands of applicants 鈥� who had spent years preparing for the test that would determine their ability to practice law 鈥斅�. Software glitches, login issues and system crashes prevented them from completing the exam, leaving their professional futures in limbo. , triggering a class-action lawsuit, legislative inquiries, and widespread outrage among legal educators and bar candidates alike.

While legal technology has the power to transform the profession, this incident underscores a fundamental truth: Technology must be implemented thoughtfully, with rigorous checks and safeguards in place.

Otherwise, the legal industry risks making itself more vulnerable, not more efficient.

Legal tech鈥檚 path

Over a decade ago, . These were very early days and entirely full of hope. Legal technology was seen as the future of the legal profession, the answer to inefficiencies, high costs and barriers to access. The belief was that if we could just build the right platforms and tools, we could revolutionize the way law was practiced.

But there were two foundational problems in those early days: Many of the ideas simply weren鈥檛 very good, and the people running them were inexperienced. Even the promising ideas often failed because there wasn鈥檛 enough venture capital willing to back these unproven concepts.

Fast-forward to 2025, and the landscape looks very different. The people building legal technology today are smarter, more experienced and often come from the legal industry itself. The money is also there 鈥� venture capitalists now recognize the potential of legal tech and are willing to invest in it at serious levels. The problem is, despite these advances, some of the technology itself still isn鈥檛 good enough.

It fails at critical moments, as we just saw with the California Bar exam. That鈥檚 not just an inconvenience 鈥� it鈥檚 a crisis that affects real lives.

The introduction of new technology into high-stakes legal environments should never come at the expense of reliability. The 鈥檚 decision to implement a new exam platform without sufficient testing or contingency plans is a textbook example of how legal tech can go wrong when it is not deployed responsibly.

The exam, which was developed in partnership with , was meant to modernize the licensing process, making it more streamlined and accessible. Instead, it created chaos.

. The California Bar has now offered a retake in mid-March, acknowledging the gravity of the situation. But a retake does little to undo the stress, lost time and financial hardship suffered by those affected. Many examinees had already taken time off work, paid for expensive bar prep courses, and made personal sacrifices to be ready for the test. Now, they are being asked to do it all over again 鈥� not because they failed, but because the technology did.

Finding a solution

The silver lining of this dark cloud is that this failed whale of a Bar exam has finally ignited a desperately needed conversation about how legal technology should be integrated into professional systems.

The failure of the California Bar exam is not an isolated event, . We have seen similar issues before, including the disastrous rollout of remote proctoring software during the pandemic. AI-powered proctoring systems have repeatedly been shown to have biases, often flagging neurodivergent test-takers or those from certain racial backgrounds at disproportionately high rates. When technology is not properly vetted, it does not simply inconvenience people 鈥� it can derail careers and create systemic inequities.

The legal industry just can鈥檛 afford to adopt technology blindly because of how serious an industry the law is. While legal tech can absolutely be a powerful tool, it must be used with intelligence, caution and a broad and deep understanding of its limitations.

Every system that is implemented must be thoroughly tested under real-world conditions, with redundancy plans in place to account for potential failures. It is not enough to assume that technology will work just because it is new or highly funded. What we keep forgetting in the law is that the potential cost of technology failure is simply too high.

We also need to keep front of mind that legal technology absolutely has to be developed with human oversight at its core. The best legal outcomes still rely on human reasoning, discretion and ethical judgment 鈥� qualities that technology, no matter how advanced, cannot replicate.

The role of technology should be to enhance the capabilities of lawyers, judges and legal professionals, not to replace them or introduce unnecessary risks into the process.

This incident should serve not as an argument against legal technology, but rather a call for greater accountability in its implementation. The legal profession has to be a lot more proactive and careful to ensure that new technological systems are reliable, equitable and subject to rigorous scrutiny before being deployed.

This means not only better testing but also ongoing monitoring and the willingness to pull failing systems before they cause harm. And, yes, I know that many in the legal profession who are reading this remember those very early days when lawyers and law firms were extremely shy about using technology, even to the point where startups getting a pilot project at a law firm was so much work. That was, in retrospect, not entirely a bad thing, maybe it was a failsafe we need to find intelligent ways to revisit.

The California Bar exam disaster is an embarrassment for the institutions that allowed it to happen. But more importantly, it is a warning sign for the entire legal industry. If we do not learn from this, we will see more failures 鈥� failures that could impact not just test-takers, but clients, courts and the fundamental functioning of the legal system.

Technology can be a tremendous asset, but only when used intelligently. If we let our reliance on technology outpace our ability to control it, we will not be making the legal industry better 鈥� we will be making it weaker.

is the chief strategy officer for . He holds a law degree and has taught entrepreneurship at and the , and was elected to Fastcase 50, recognizing the top 50 legal innovators in the world. His writing has been featured in , , , , , , , and many other publications. He was nominated for a Pulitzer Prize .

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In an oft-cited , analysts estimated that an astounding 44% of legal work could eventually be automated. AI-enabled software will be taking on much of this workload.

Startup investors are backing this notion with their checkbooks. In recent quarters, funding to companies in the legal and legal tech sectors has surged to levels comparable to what we saw during the 2021 market peak.

To illustrate, we charted annual legal-related startup investment for the past six-plus years below.

Quarterly funding has more ups and downs, but has also mostly held strong, as charted below.

It鈥檚 an AI thing

Not surprisingly, the overwhelming majority of recent funding for the legal tech sector has gone to companies that are incorporating artificial intelligence in their offerings.

Per SA国际传媒 data, an estimated 79% percent of all legal-related startup investment since 2024, or nearly $2.2 billion, has gone to companies that also fit in our AI categories. That includes the two biggest fundraisers: and .

Vancouver-based Clio, a legal tools platform, is by far the largest recent funding recipient in the space. It locked up a $900 million last summer at a $3 billion valuation, with as lead investor.

Clio鈥檚 software lets law firms automate processes such as client intake, accounting and document management. Its generative AI offering, , also helps lawyers complete routine tasks more efficiently.

San Francisco-based Harvey landed its $300 million Series D just this month. Led by , the financing sets a $3 billion valuation for the 3-year-old company, which offers an AI platform for legal and professional services.

Other large, recent rounds went to:

• , a San Francisco-based provider of cloud and AI-based legal case management tools, secured $135 million in an October led by .
• , a U.K. company offering an AI-enabled platform for legal contracts, closed on $75 million in a this month led by Point72 Private Investments.
• , a New York-based startup, raised $45 million this month for its business model of employing AI to search for drugs that cause harm and could be the basis for lawsuits.

Saving time

Probably the most commonly touted use case for AI-enabled legal tech tools is that they allow practitioners to save time.

According to an from , within a year AI could free up an additional four hours of work per week for white-collar professionals in law and other fields. Within five years, that could grow to a whopping 12 hours per week.

For now, the effect of new tools on legal employment remains to be seen. On the one hand, firms and in-house legal counsel departments may find they don鈥檛 need so many people. On the other hand, lawyers could find they are able to work more productively, serve more clients and increase incomes in the process.

Given that so many innovative startups at the intersection of AI and legal tech are in the early stages of scaling, we鈥檒l just have to wait and see how it all plays out.

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Correction: The chart with annual legaltech funding was updated with correct amounts.