Mathis Artwork | Digital Visual Vector | Getty Images
Legal tech company Luminance has raised $40 million in new funding from investors to expand its U.S. operations, capitalizing on a wave of investor interest in artificial intelligence.
The company told CNBC it raised new funding in a Series B round led by U.S. venture fund March Capital. National Grid Partners, the venture capital arm of State Grid, and the law firm Slaughter and May also participated in this round of financing.
“We have a lot of interest from venture capital firms,” Luminance CEO Eleanor Lightbody told CNBC on Tuesday.
Lightbody said the fact that artificial intelligence is now a “hot topic” certainly helps, but she added that Luminance has the metrics (such as annual sales results) to match the interest it’s getting from investors.
Lightbody said companies are investing in artificial intelligence tools like Luminance to stay ahead of the competition and reduce costs.
“Everyone wants to stay competitive,” she told CNBC. “We want to create opportunities that they didn’t know existed.”
Luminance said its annual recurring revenue has grown about five times over the past two years, but declined to disclose the figures to CNBC. The company’s clients include Koch Industries, Hitachi, Yokogawa Electric, Liberty Mutual, LG Chem and BBC Studios, among others.
Legal business
Founded in September 2015, Luminance develops machine learning models to help lawyers automate contract reviews and reduce the time required to sign contracts. The company was co-founded by lawyers, mathematicians and mergers and acquisitions experts from the University of Cambridge.
Luminance is one of many companies generating buzz among investors due to the hype surrounding artificial intelligence. Companies such as OpenAI, Anthropic, Cohere and Mistral have raised billions of dollars from venture capitalists, and big tech companies like Microsoft and Amazon are also interested.
Microsoft has invested more than $10 billion in OpenAI, and the company recently completed a secondary stock offering led by Thrive Capital at a valuation of $80 billion.
Luminance declined to comment on its valuation, but Lightbody said it received a “significant premium” compared to the $100 million valuation the company received in 2018, when Last external funding raised.
Investors have recently been betting on industry-specific AI companies, sometimes tending to pursue a form of “general-purpose” AI that can perform any task imaginable.
Lightbody said that in industries such as law, which require a strong focus on a company’s specific legal controls and decisions, general-purpose artificial intelligence solutions like ChatGPT are not the answer.
“We’re going to start to see more specialized AI companies emerge,” Lightbody said. “That’s exactly what we’re doing.”
She noted that large domain-specific language models are “absolutely critical” in the legal field.
“This is important because unlike generative AI, it doesn’t matter if the answer is wrong because the whole point of AI is to figure out the answer, and that can’t happen when the law is involved.”
Generative AI tools like ChatGPT are known for producing “hallucinations”—answers that contain false information about certain historical events in an attempt to guess the answer to a user’s question.
Lightbody said Luminance plans to invest aggressively in expanding its U.S. operations, including hiring new executives locally and exploring new offices.
autopilot
Luminance develops artificial intelligence based on its proprietary Large Language Model (LLM). LLM is an artificial intelligence algorithm that can realize general language processing and generation.
The business is backed by Invoke Capital, the venture capital arm owned by controversial British entrepreneur Mike Lynch.
Lynch is accused of artificially inflating the value of his software company Autonomy to Hewlett Packard Enterprise, which is suing Lynch for billions of dollars in damages.
he has been Charged by the U.S. Department of Justice Includes 14 counts of wire fraud, one count of securities fraud and one count of conspiracy to commit wire fraud. Lynch denied the accusations and said Autonomy underperformed under HPE due to poor management by its new owner.
Lightbody said the U.S. lawsuit against Lynch will not create uncertainty for Luminance and that Lynch is not involved in the company’s day-to-day operations.
Correction: This article has been updated to reflect the following spelling Eleanor Lightbody’s name.
About The Author
