With Harvey and Legora topping eight-figure funding rounds, legal tools have proven to be one of the fastest-growing and most hotly contested industries among AI startups. However, while these tools are focused on private practice, some startups believe there is still a lot of unserved legal market.
Sandstonewhich announced $30 million in Series A funding on Tuesday, is focusing on an overlooked part of the legal space, focusing on the tangle of overlapping tasks and systems that in-house legal teams face.
The Series A round was led by Lightspeed Venture Partners, with participation from existing investors Sequoia, Mantis VC, SV Angel, Operator Partners, Kearny Jackson, Daybreak Ventures, Litquidity Ventures and others. The Series A comes just six months after a $10 million round in January led by Sequoia.
As the founders describe it, Sandstone’s initial user base will be legal departments in small and medium-sized businesses.
“They open their laptop in the morning, they see all the work coming in through different recruitment channels, whether it’s Slack messages, email, Jira,” co-founder and CEO Jarryd Strydom told TechCrunch. “Artificial intelligence helps them route and meditate that they’re working right, and then they can build custom workflows on top of our platform to actually perform tasks, whether it’s drafting, reviewing or providing legal analysis.”
The result has little in common with legal reasoning systems like Harvey and Legora. Instead, Sandstone focuses on relationship management and workflow automation, both tailored to the unique requirements of in-house legal work. As Strydom sees it, focusing on in-house legal departments allows Sandstone to provide value where more generalized AI deployments often fall short.
“One of Lightspeed’s beliefs has been that they really believe in highly specialized vertical AI,” Strydom said, “because it takes a detailed understanding of workflows to really understand how AI can help.”
Sandstone will also face stiff competition from frontier AI labs, which are increasingly turning their attention to the legal space. Anthropic is steadily expanding its Claude for Legal offering, adding new tools in May for case law research and deposition preparation.
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