- Lexion — an Allen Institute for Artificial Intelligence (AI2) spinout — announced it raised $4.2 million in seed funding
Lexion — a company that spun out of Allen Institute for Artificial Intelligence (AI2) with an experienced team — announced it raised $4.2 million in seed funding from Madrona Venture Group and Wilson Sonsini Goodrich & Rosati.
What does Lexion do? The company built an AI-powered solution for managing contracts — which helps legal teams track key obligations in their contracts automatically and without slow and expensive document review. And the easy-to-use and reliable system is aimed at high-growth emerging companies and established players that typically have dozens to thousands of customer, vendor, and employee agreements to manage, but lack the resources needed to efficiently handle that workload size.
And Lexion applies cutting edge AI to ensure that companies don’t miss a “gotcha” clause or that they spend hours of expensive outside counsel time in reviewing piles of contracts. Plus Lexion’s platform can ingest all of a company’s contracts, automatically extract dozens of key terms, and deliver an organized repository of agreements that can be filtered, sorted, and searched across in just a few hours. The company’s proprietary natural language processing (NLP) engine can also rapidly be trained to extract previously unseen clauses or new document types ranging from insurance agreements to commercial real estate documents.
Lexion was founded by Gaurav Oberoi (serial entrepreneur) and Emad Elwany (AI technology leader), and James Baird (engineering veteran).
“Contract management is a pain point for every organization. Whether you manage 30 or 10,000 agreements, you still need to keep track of key obligations,” said Oberoi in a statement. “Yet, the most common approach – searching through file folders, reading through hundreds of pages of legal text, tracking terms in spreadsheets, and manually emailing reminders – is not scalable for any organization and often results in missing critical obligations and opportunities, while draining significant management time and resources. We are excited to solve this problem with cutting-edge automation, packaged in an intuitive product.”
This round of funding validates the need for effective contract management across legal, sales, procurement, and finance teams. This is due to organizations losing an average of 9% revenue every year due to poor contract management through erroneous overpayments, failure to apply discounts, and missed expirations — according to research conducted by the International Association for Contract & Commercial Management.
“Gaurav, Emad, and James are just the kind of entrepreneurs we love to back: smart, customer-obsessed and attacking a big market with cutting edge technology,” added Tim Porter — managing director at Madrona Venture Group — who is also joining the company’s board. “AI2 is turning out some of the best-applied machine learning solutions, and contract management is a perfect example – it’s a huge issue for companies at every size and the demand for visibility into contracts is only increasing as companies face growing regulatory and compliance pressures.”
In conjunction with the funding round, David Wang of the Corporate Strategic Innovation Counsel is joining the board.
“We are excited about Lexion because it will enable legal teams to manage their contractual obligations proactively rather than reactively, increase awareness of compliance and risk exposure across the organization, and increase the speed and efficiency of major transactions,” explained Wang. “In our first-hand evaluation of legal analytics solutions, we found that Lexion outperformed the market across a range of criteria relevant to understanding legal contracts, giving us confidence in their ability to produce significant value for our clients.”
In contrast to expensive legacy contract management systems that have complex setup and training, Lexion focuses on rapid onboarding, affordable subscription pricing, and an easy-to-use interface that users can easily understand. Lexion is able to identify and extract dozens of key terms in contracts such as termination notices, renewal dates, and payment terms out-of-the-box. And for a small additional fee, companies can request custom models to automatically extract information particular to their business or industry.
