Tauranga-based legal software startup LawVu has inked a deal that will see one of the US social media giants adopt its product.
Founder and chief executive Sam Kidd says he cannot name the social media company at this point. But he can reveal the deal comes on the back of a series of big wins across the Tasman that have seen Telstra and Nissan Australia adopt his company's software.
Here, Fonterra, James Hardie and Sky TV are hero customers. PwC and lead-services provider Axiom are partners.
Now, Kidd wants to
expand in the US and beyond.
To that end, LawVu has just closed a $2.5 million seed round led by Australia's AirTree Ventures and US VC firm Shastra Ventures and supported by NZ Growth Capital Partners (formerly NZVIF).
Kidd says the raise is a "stepping stone" to a Series A raise mid-year, which he sees being in the US$10m ($13.7m) range.
The startup, founded in 2015, has already been in high-growth mode recently. In early 2020, in an earlier seed round raised $3.8m in an initial seed round, led by former Russell McVeagh lawyer turned investor Kent Gardner and supported by Icehouse Ventures.
That year, LawVu increased staff numbers from 20 to 70.
The 2020 seed round was at a $20m valuation.
Kidd declined to give a post-money valuation for the latest raise, but he says the funds will be used to expand further into Australia, the US and beyond, in part by putting on the ground off-shore. He sees LawVu finishing the year with around 100 staff, with software development remaining in NZ and sales roles added in North America.
LawVu makes cloud-based software for in-house legal teams. Its cost per month depends on how many modules you subscribe to; they cover areas including creating contracts, collaboration and sharing documents. Its platform can work with a range of other software, including Outlook and e-signature service DocuSign.
Kidd and co-founder Tim Boyne got the idea when both were working in and around corporate NZ in the early 20-teens, Kidd for a startup that integrated accounting software with IRD's systems, Boyne as an IT operations manager at a law firm.
"Often in a big firm, there's a lot of repetitive legal work, or sometimes the left hand doesn't know what the right hand is doing," Kidd says.
The pair thought in-house legal teams needed their own software platform, just as sales people had Salesforce.
"Our platform is finally offering a way for not only legal teams but also management to see how the legal function is performing inside their company," Kidd says.
Tauranga City Council became LawVu's first customer, and something of a test-bed. Dunedin City Council came next, followed by top-tier corporates.
The CEO has no plans to relocate to a big city.
"We'd love to keep growing the engineering team in Tauranga," Kidds says.
The CEO says LawVu has tripled its annual recurring revenue in the past year, but won't give detailed financials. He does offer that existing customers spent 140 per cent more over the past 12 months as they bought more licences, so appear to be voting with their wallets in terms of customer satisfaction.
Covid, Auckland house prices help
In LawVu's early days, the location was a drawcard. "We were paying Auckland and Wellington salaries in an area with much cheaper housing and a great lifestyle," he says.
The housing price gap has since narrowed, but "Now, remote working is the new normal," he adds. Recent hires are working from various provincial locations, including Queenstown and Invercargill. "We fly people in when we need to."
The provincial focus hasn't stopped big hires. Former Xero CFO and COO Ross Jenkins was recruited to lead its board and former Pushpay staff have joined its product team.
Earlier US sales have come through Zoom pitches. "That's one of the positives of Covid," Kidd says. It's been a great leveller. Whether you're 12,000km away or 12km away, everyone's presenting via video."
LawVu has usually found itself pitching against software companies that are much larger, but also offering on-premise (pre-cloud) ELM (enterprise legal management) software, Kidds says, which can be complicated and require a big implementation team. The Kiwi startup positions itself as a modern, nimble, cloud-age contender.
Pitch event pays off
The AirTree investment followed a long courtship.
"They've been following us since an Icehouse event a couple of years ago," Kidds says.
The Aussie VC firm first enountered Law Vu at the 2019 iteration of Icehouse Ventures' annual Icehouse Investor Showcase, which was held at Spark Arena.
AirTree partner James Cameron said earlier this week, "In-house legal teams are an enormous market that is quickly waking up to the importance of having modern productivity and collaboration tools - and LawVu has emerged as one of the leading contenders to own this exciting new software category.
"The LawVu team have deep and hard-earned insights into how legal teams operate and are obsessed with making their customers' lives easier - and this has been the secret behind their rapid expansion and their global blue-chip customer list. We're very excited to support the team as they grow a global category leader from NZ."
The Crown-backed NZ Growth Capital Partners recently got a $240m injection from the NZ Super Fund for its new $300m Elevate fund, and is trying to address NZ's venture capital gap, in part, by co-investing in local startups with Australian VCs such as AirTree and Blackbird Ventures.
NZGCP associate director Jacques Richter says "We're passionate about backing
innovative Kiwi tech companies that identify a niche market with a problem to solve. We've been impressed by the LawVu team and their ability to pioneer legal tech software."