Legal tech start-up Apperio is switching to growth mode after closing a $10m funding round that will enable it to double in size to 40 staff and expedite further expansion into the US market.
Apperio, founded in 2013 and formerly called Legal Tender, is a platform that provides companies with real-time transparency on legal fees while tracking matters. It can also be used to assess and monitor law firm performance: features which combine to both manage in-house budgets and help general counsel (GC) show value.
The London-based start-up announced its latest funding round today (28 August), bringing total investment in the company to more than $14m. Dentons was an early investor in the company , while the latest funding round was led by venture capital firm Draper Espirit, a new investor, and supported by existing investors and fellow venture capital firms Notion and IQ Capital.
Apperio founder Nicholas d’Adhemar (pictured) told Legal Business the funding, which it had been working towards for a good portion of this year, gives the company a ‘tremendous opportunity’ to grow all aspects. Commercial and customer success roles will be a particular focus as it doubled its 20 staff over the next year, as well as establishing a physical presence in the US by mid-2019.
‘We’re changing our brains into business growth mode,’ he said. ‘We’ve known about Drapers for some time; they have an amazing reputation and one of the key aspects for us when we’re entering a phase where it’s about growth is that that’s what they’re about: taking early stage and helping them grow and taking European companies into the US.’
Apperio’s main corporate clients include Network Rail, Deliveroo, and most recently Monzo. But its platform is also plugged into nearly 80% of the UK’s law firms by revenue, as well as half of the top 40 US firms: a number that has doubled in the past month. It claims to have tracked 47,000 matters and £2.2bn of fees.
It also has about 40 corporate customers, with d’Adhemar noting growth to date has largely been achieved through sales and marketing ‘on a shoestring’, as well as law firm referrals.
He added: ‘Looking at the US, it is ten times the size in terms of market share. We’ve got a good beachhead there but now is the right time to look to put boots on the ground. US GCs face the same issues, and if anything, the proportion of legal spend to revenue is slightly higher in the US. We’re really excited about the US but that’s not to say we’re not excited about the UK, Europe and further afield.’
Monzo general counsel Dean Nash told Legal Business his decision to use Apperio earlier this year came ahead of an expected internal focus on legal spend. The banking start-up, eyeing a $1bn valuation with its latest funding round, has been in high-growth mode and focused on the cost of additional customers, with legal spend not yet a priority.
Nash said legal spend at Monzo, this year expected to be about £1m, was only going to increase as the company grew, so his challenge was to decrease the rate of that growth. He could do that by either adding to his eight-strong team, using cheaper law firms, or by keeping a keen eye on external spend.
Apperio represented the latter, and was brought to his attention by the Disruptive GCs network. Nash said the overhead to integrate the platform was basically nil and took all of a couple of emails to set up. He was pushing Apperio to provide more insights on the back of the data, however.
Nash commented: ‘I’m anticipating a couple of things to happen as a result of plugging into Apperio. One is just the awareness that we’re plugged into it forces the firms to think twice about letting the clock run. Secondly, I can interrogate the data and say, “Why is this running out of control?” I can sit down with the firm and say, “Where can we trim these numbers down?”’
Apperio’s investment round follows a string of bigger funding announcements for a suite of legal tech start-ups in recent months. In July, London-based Bloomsbury AI joined Facebook in a deal reportedly worth between £23m and $30m. A month earlier, an artificial intelligence (AI) company used by Linklaters, Eigen Technologies, secured £13m in funding, while that same month email security AI company Tessian rose £9m.
D’Adhemar sees changing attitudes from potential investors to legal tech. Many start-ups faced the difficulty of finding funding and capability to meet the understandably high security requirements law firms required, but for those who could meet them, decent investments were flowing.
‘Europe seems to be waking up to legal-tech in quite a big way. The best will rise to the top, but I’m sure there will be chunky rounds in the coming months.’