Members of the VXT team with co-founders Lucy Turner and Luke Campbell front right.
Members of the VXT team with co-founders Lucy Turner and Luke Campbell front right.
Christchurch-founded legaltech firm VXT has raised $2.5 million at a $45m valuation including backing from Silicon Valley venture capital firm Alpine VC.
VXT’s software wrangles calls, text and other communications for lawyers, including using AI to transcribe and summarise exchanges, then plugging file notes into a firm’s practice management software.
Chief executive Luke Campbell’s LinkedIn bio simply reads: “Putting an end to Microsoft Teams”.
He founded the firm in 2019 with fellow Canterbury University student Lucy Turner (chief technology officer). VXT began as a tool for converting voicemails to text.
The pair raised $600,000 in seed money, and backing from start-up programmes run by their university, Google and Vodafone (now One NZ).
It quickly gained 10,000 users, including 1000 paying customers, Campbell says.
But it wasn’t enough to make ends meet and it soon ran up against the “visual voicemail” introduced by phone makers and carriers that did the same thing.
“We were quickly running out of money and it was, it was getting more and more difficult to grow the business,” Campbell said.
His solution was to go and talk to the paying customer. Many of them were real estate agents, recruiters, small business owners, tradies and lawyers.
“Basically everywhere we went, we were rejected,” Campbell says.
But by talking to so many customers – particularly law practice managers and others in legal firms – in close to 100 interviews, the VXT team learned a lot about what was needed.
Campbell particularly spent time with a clutch of law firms, including Saunders & Co, a firm with around 100 staff that became an anchor customer for VXT’s new, law-focused product, VXT Phone. Recruitment firms and accounting shops are other targets.
Today, VXT has more than 600 customers, with some 90% outside New Zealand. The United States is the firm’s second-largest and fastest-growing market, having experienced 400% growth in the past year, Campbell says.
“Our customers make more than half a million calls in VXT every month. About 30% of those calls are recorded. And many of our users will have those call recordings transcribed and summarised using AI.”
The founder has just returned to Christchurch after two years living across the Tasman. He says his plan is to spend five months of the year in New Zealand, five months in Australia and two months further afield.
Last year he did 43 flights, but he says the object wasn’t sales, but simply talking to customers and watching them work.
His approach reminds the Herald of Education Perfect founder Craig Smith, the University of Otago graduate who obsessively tweaked his software after closely observing users (and who would later see his firm sold to US private equity giant KKR in a $455m deal).
Luke Campbell serves as CEO and Lucy Turner as chief technology officer. The pair say lawyers save on paperwork that comes from phone calls, messages and meetings. VXT uses AI to automate as much of that as possible.
After watching a customer in real life, “I might, like, move a button two pixels to the right or make it larger. All of those small optimisations are just as important as the foundational changes because when you add 1000 of them together VXT becomes incredibly easy to use and valuable.”
VXT has also been backed by local VCs Global From Day One (GD1) and Phase One Ventures.
The March capital raise is a pre-Series A. Campbell says there’s now lots of runway, with no pressing need for a Series A. VXT could be profitable at any time if it chose but prefers to push for growth, he says.
From its early days, it knows how to run lean, he says.
Head of marketing Sophie Svenson recently recalled on LinkedIn how, after joining as a commission-only contractor, “in my first two months at VXT, I was only paid $130”.
A bit more is coming through the door now.
VXT’s monthly recurring revenue is currently at a $3m annualised run rate and growing 10% per month, Campbell says.
There are 20 staff today, which will grow to 26 in a couple of months, he says. (VXT is hiring here.)
More features are planned, with heavy dollops of AI, including a virtual receptionist. The aim is to become a broader part of every law firm’s tech stack.
“At our current growth rate, we expect to approach $100m in annual recurring revenue within three years or so,” Campbell adds.
Even since the March raise, a transaction between shareholders upped the value of the firm again, this time to $57m.
Chris Keall is an Auckland-based member of the Herald‘s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
