Hey everyone - a few weeks ago I wrote about how Generative Artificial Intelligence (AI) is changing the music world through AI-generated music, and how many other industries are soon going to experience similar levels of disruption.
Well, up next on the AI chopping block is the legal industry.
Over the past few weeks, thousands of prominent global law firms including DLA Piper, Kirkland & Ellis, Skadden, and Allen & Overy have publicly announced their plans to integrate AI into their day-to-day. Why you might ask? AI does a great job engaging in sophisticated writing and research and therefore many law-specific AI tools complete tasks faster and with greater accuracy than humans.
Some of these specific use cases include:
Litigation preparation: Extracting salient information from an enormous set of documents
Drafting motions to file with a court: Produce initial drafts that cite relevant laws, advancing arguments, and rebutting opposing arguments
Analyze trial transcripts in real-time: Helps attorneys choose which questions to ask witnesses
Contract analysis & contract preparation for in-house counsel
Companies like CoCounsel, Luminance, Harvey, TermScout and Latch created solutions around these use cases and have cemented themselves as must-have tools in the space. Sequoia Capital, which is the lead investor in Harvey, said there are more than 15,000 law firms on a waiting list to start using the platform.
The urgency to adopt AI by global law firms is striking: The chair of DLA Piper's AI practice described it as "an arms race, and you don't want to be the last law firm with these tools".
Many investors have been trying to understand and develop theses around how to pick the long-term winners in AI. It is too soon to tell which thesis will prevail, but most investors agree that we are in an opportunistic period where AI applications with high adoption and mission-critical use cases will accrue significant value (a.k.a AI legal tools).
To my friends that are in law school, please let me know if I butchered any explanations here…
Let's get to it:
Slash, a San Francisco-based online banking platform for young entrepreneurs raised $15 million in Series A funding lead by NEA and Y Combinator.
Why this is interesting: Since Silicon Valley Bank’s collapse in March, startups and entrepreneurs have been seeking alternative specialized banking partners. However, there are very few other startup-focused banks which is why Mercury Bank (arguably SVB’s main competitor at the time) saw over $2B of inflows in just the week following SVB’s demise. In a recent interview, Mercury’s CEO even said, “strangely, we’re in a very uncompetitive space, and that’s the weird thing for people to see…you know, SVB was our main competitor.” Well, it seems like others sniffed out the greenfield opportunity and now Slash is entering the same space. Slash’s products are similar to Mercury's and also features bank accounts for young entrepreneurs under the age of 18. Whether or not their young entrepreneur initiative works out, this is definitely a large enough market for multiple winners.
Optery, a San Francisco-based personal information removal platform, raised an additional $2.7 million in seed funding led by Bayhouse Capital.
Why this is interesting: A research survey conducted by NordVPN revealed that half of Americans said they would delete themselves from the internet if they could, and about half said they have no reason to have their name on the internet. Although the survey’s population sample may be a bit skewed, it is fair to say that millions of people globally do not want their information publicly available. The current alternatives to Optery are costly services businesses that are much more manual in nature. For that reason, between the clear problem statement, market size and competitive wedge, it seems like we found a winner.
Wayhome, a London startup that provides first-time homeowners with a part buy, part rent option raised a $10 million Series A round led by Fintech Fund.
Why this is interesting: If you paid attention to Neal’s Deals last week, we spoke about Tembo whose platform enables consumers to shop for mortgages across hundreds of lenders. I was concerned with Tembo because it may struggle to find success in low interest-rate environments. To me, Wayhome’s gradual home ownership model is less dependent on macro-level factors, but is a more costly solution. Essentially Wayhome will purchase a home with you and become co-owners. Thereafter, they will charge rent proportionate to their ownership. This ultimately increases the affordability of a home, but is definitely more expensive in the long run than taking out a mortgage for a property you can afford. As altruistic as their website looks, Wayhome clearly has some alternative motives.
Deals in the Works: If you want to learn more - feel free to reach out
Marketplace and booking platform for family members seeking services to help take care of loved ones
Dating app focused around matchmakers who curate groups of people based on their connections
Freight forwarder software for e-commerce SMBs
Platform that allows consumers to connect with authorized AI clones of celebrities
Restaurant expense management platform focused on optimizing labor scheduling around sales forecasts and managing tips
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Quote of the week:
Tell me and I forget. Teach me and I remember. Involve me and I learn.
-Benjamin Franklin
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To all my new subscribers - welcome! Excited to have you join the community :)
Have a great weekend everyone!!!!