Generative AI is rapidly improving its ability to interpret intricate texts, and this advancement is proving particularly beneficial for startups tackling the complexities of the legal field. This progress has fueled a surge of activity in the legal tech sector over the past year.
Eudia, a legal tech startup, recently secured $105 million. Genie AI, based in London, raised €16 million last year. Harvey, a U.S.-based company, received a $300 million investment led by Sequoia. Lawhive raised $40 million, with a focus on serving U.S. lawyers. Joining this list is Luminance, which is marketing itself as a “legal-grade” AI.
Claiming to offer highly accurate analysis of legal issues and contracts, Luminance has successfully raised $75 million in a Series C funding round, spearheaded by Point72 Private Investments. This round is noteworthy, representing a significant capital raise for a dedicated legal AI company within both the U.K. and Europe. In the past 12 months, the company has raised over $115 million, and $165 million in total.
Luminance was originally developed by Adam Guthrie (founder and chief technical architect) and Dr. Graham Sills (founder and director of AI), both academics based in Cambridge. The late Dr. Mike Lynch, founder of Autonomy, provided seed funding. Luminance utilizes a “Panel of Judges” AI system to automate and enhance a business’s approach to contracts, including generation, negotiation, and post-execution analysis. The startup employs a proprietary large language model (LLM) to power its flagship product, Lumi Go, which allows clients to submit draft agreements and have the AI negotiate on their behalf.
Instead of using a GPT (generative pre-trained transformer), Luminance employs what it calls an LPT (legal pre-trained transformer), trained on over 150 million verified legal documents. Many of these documents are not publicly accessible, which the company believes gives its platform a competitive advantage. Other legal tech startups typically build upon existing general-purpose LLMs.
“It’s a domain-specialized AI that is built with lawyers in mind… They need to understand that the outputs have been validated and can be trusted, and that’s exactly what our specialized AI can achieve,” stated Eleanor Lightbody, the startup’s CEO, who took over from the founders after the Series A round.
Lightbody explained that the platform was built with the understanding that different models excel in different areas. “What you want is to have a mixed model approach, where the models can check each other’s ‘homework,’ and you can get the most accurate and the most transparent answers,” she said. She claims this approach sets Luminance apart from competitors, as its clients can utilize the platform throughout the entire contract lifecycle.
Luminance serves over 700 clients across more than 70 countries, including companies like AMD, Hitachi, LG Chem, SiriusXM, Rolls-Royce, and Lamborghini. Following the opening of three offices in San Francisco, Dallas, and Toronto, and the expansion of its U.S. headquarters in New York, the company has tripled its headcount in North America.
The Series C round also saw participation from Forestay Capital, RPS Ventures, and Schroders Capital, as well as existing investors March Capital, National Grid Partners, and Slaughter and May.
