Swedish legal AI startup Legora seeks $150M at $1.8B valuation

Legora, a Stockholm-based legal AI startup, is in talks to raise $100-150 million at a $1.8 billion valuation, just four months after its Series B round. The funding round, led by Bessemer Venture Partners, reflects the rapid growth in legal AI adoption as law firms increasingly turn to artificial intelligence to automate repetitive tasks and boost efficiency.

Key growth metrics: Legora has experienced explosive revenue growth, jumping from $4 million to $23 million in annual recurring revenue, with projections to reach $40 million ARR by year-end.
• However, only $1 million of current revenue comes from U.S.-based customers, suggesting significant untapped potential in the American legal market.
• The startup now serves 300 law firms as customers, including prestigious firms like Cleary Gottlieb and Goodwin.

The big picture: Legal AI is becoming a massive investment opportunity as artificial intelligence proves particularly well-suited to the profession’s document-heavy, research-intensive workflows.
• AI startups in the legal sector have raised $2.4 billion in funding this year alone, according to Crunchbase data.
• A 2023 Goldman Sachs study estimated that 44% of legal work could be automated, highlighting the sector’s transformation potential.

How it works: Legora’s AI software integrates directly into everyday tools like Microsoft Word, allowing lawyers to analyze thousands of documents simultaneously, conduct comprehensive research across databases, and draft contracts within their existing workflows.
• The platform helps attorneys save time on repetitive tasks including document review, contract drafting, and legal research.
• Thousands of lawyers are already using the software for everything from developing arguments in mock trials to providing assistance during actual court hearings.

Competitive landscape: Legora joins a crowded field of well-funded legal AI companies experiencing rapid growth.
• Harvey, an early AI darling, raised $300 million at a $5 billion valuation in June and announced more than $100 million in annual recurring revenue.
• Eve, which focuses on AI for plaintiff lawyers, recently raised $103 million at a $1 billion valuation and claims over 450 law firm customers.

What you should know: The startup was cofounded in 2023 by 25-year-old Swedish entrepreneur Max Junestrand, a Y Combinator alum with no legal background who conducted extensive research by interviewing approximately 100 lawyers.
• Junestrand would send LinkedIn messages to lawyers asking to meet for lunch, offering to pay their hourly rate to learn about the profession’s inner workings.
• The company has grown to 100 employees and previously raised $80 million in Series B funding at a $675 million valuation from investors including Iconiq, General Catalyst, and Redpoint Ventures.

Why this matters: The legal profession’s traditionally conservative approach to technology is rapidly shifting as AI demonstrates clear value in reducing workload and increasing efficiency, making law firms among the most eager early adopters of artificial intelligence tools.