It seemed like it would be tough to top 2018, which was a banner year for investments in legal technology, with the total hitting $1 billion. But then, two weeks ago, came news of a $200 million strategic investment in Houston-based Onit, and now comes news of another major investment in a legal technology company_ $83 million in DISCO, an e-discovery company headquartered in Austin, Texas.
Today’s announcement brings the total amount raised by DISCO to $135 million. In a statement, the company said:
This investment reflects the market’s consolidation behind DISCO as the leading cloud ediscovery platform, and the growing customer consensus that cloud ediscovery will replace legacy ediscovery services vendors and software providers.
DISCO says the total raise of $135 million is more than has been raised by any other enterprise legal technology company. Whether or not that is true depends on how you interpret the investment. For example, the $200 million investment in Onit is certainly greater in dollars, but was characterized as a “strategic investment,” which is generally understood as more of a partnership between two companies that could eventually lead to an acquisition.
“From our point of view, [the Onit investment] is very different from the venture round we announced today,” Laura Wooster, DISCO’s public relations representative, told my by email. “As indicated in the press release, Onit “formed a partnership” with K-1 Investment Management, which in our view is similar to an acquisition. Strategic investments and partnerships are quite different than funding rounds. DISCO’s funding (in this round and all previous) allow us to remain independent.”
The investment was led by Georgian Partners, a Toronto-based venture-capital firm with expertise in applied artificial intelligence. Existing investors Bessemer Venture Partners, LiveOak Venture Partners, The Stephens Group, and venture-debt provider Comerica all participated in the round. Tyson Baber, a partner at Georgian Partners, joined DISCO’s board of directors.
DISCO said that it will use the money to rapidly scale up its U.S. operations and to build new products “that transform other areas of legal practice. It will also aggressively pursue international growth. Last October, DISCO opened a London office and plans to establish offices in Canada, Europe, Asia, Australia, and Latin America over the next several years.
“DISCO’s mission is to create technology to modernize the practice of law,” said DISCO founder and CEO Kiwi Camara, in a statement released by the company. “Great legal technology helps great lawyers and legal teams deliver better legal outcomes for their clients. We do this in ediscovery today; over time, we will do this in all areas of legal practice.”