Just a few weeks ago, in my 2018 year-end round-up of the most important legal technology developments, I noted that it had been a banner year for investments in legal technology companies, with the total hitting $1 billion.
Now, 2019 is off to a roaring start, with news of a $200 million strategic investment in Onit, a Houston company that provides enterprise workflow products for legal management, contract management and business process automation.
The investment was made by K1 Investment Management, a Los Angeles private equity firm that specializes in investments in high-growth enterprise software companies.
Onit said it will use the investment to scale its operations to meet customer demand, enhance its platform and products, build up its marketing and sales, and develop new products. Some of the investment was used to pay off early investors, but the majority is going to future growth.
“We are very excited to partner with K1 and their significant investment in our company further demonstrates the accelerating growth trajectory for Onit,” founder and CEO Eric M. Elfman said in a statement announcing the investment. “We believe that we are clearly proving that our approach to streamlining business process – creating better workflows and not better databases – fundamentally sets us apart in the industry.”
In 2018, the largest investment in a legal technology company was the $500 million secondary investment in Los Angeles-based LegalZoom by a group of private-equity firms. The largest direct investment was a reported $100 million in Beaverton, Ore., company Exterro by New York private-equity firm Leeds Equity Partners.
K1 was also behind one of 2017’s largest legal technology investments, the $100 million combination of Litéra, Microsystems, XRef and The Sackett Group into a single business.
Onit launched nine years ago, originally as a Web-based project management tool. Elfman and cofounder Eric Smith had previously founded DataCert, a provider of matter management and legal and IP spend management for corporate legal departments that was acquired by Wolters Kluwer.
Today, it provides software for legal spend management, matter management, contract management, legal holds, legal service requests, NDAs, and sales account management.
Onit produced a podcast in which Elfman provides details on the investment and what it means for Onit. Listen below.