AI Startup Spellbook Grabs $20 Million in Series A Funding

Spellbook, a generative AI tool for drafting legal contracts, has raised $20 million in a Series A funding round led by Inovia Capital.

Toronto-headquartered Spellbook uses large language models like OpenAI’s GPT4 which has been trained on billions of lines of legal text. The company’s AI platform is integrated with Word and can automatically suggest and insert contract language into a document. Spellbook, led by its founders CEO Scott Stevenson, Matt McGuire, and Dan Rubins, was launched in 2022 as the first generative AI copilot for lawyers.

According to Spellbook, over the past seven months, the company’s customer base has increased by nearly 300% and its platform is now being used on over 86,000 contracts per month. In turn, Spellbook’s revenue growth has increased by 10x from 2022 to 2023. Customers of Spellbook include over 1,700 law firms and legal teams globally.

“We’ve been amazed by the explosive usage growth our platform has experienced, since launching Spellbook as the first generative AI contract drafting tool in 2022,” said Mr. Stevenson. “This raise marks a major milestone for our team and is indicative of the market traction we saw in 2023.”

Annie Haggar, the founder of legal consultancy Cyber GC, an Australia-based provider of security and technology focused legal and consulting advice, using Spellbook saves a huge amount of time. “Every time I’m working on an agreement, I have Spellbook open. Using their technology saves me anywhere from 25-30% of my time,” she said.

The new Series A capital will be used by Spellbook to scale its reach to 30,000 law firms worldwide. Looking forward, according to Spellbook, the company plans to develop new AI capabilities that can mimic lawyers’ styles, automate full contract workflows, and achieve up to 10x more accuracy on legal documents.

“We at Inovia are proud to support Scott, Matt and Dan and their exceptional team at Spellbook,” said Steven Woods, a partner at Inovia Capital. “Spellbook demonstrates what can happen when one deeply integrates new capabilities into high-priority workflows and relentlessly experiments, measures and iterates to drive value. We are excited to continue working together and helping this team build the future of legal technology.”

Inovia Capital invests in high-growth technology companies and focuses on early-stage and growth-stage investments in software, artificial intelligence, healthcare, and consumer internet. Inovia Capital, with $2.2 billion of assets under management, was founded in 2007 and is headquartered in Montreal.

Other venture capital firms participating in this Series A round include Thomson Reuters Ventures, The Legaltech Fund, Bling Capital, Moxxie Ventures, Concrete Ventures, Path Ventures, N49P and Good News Ventures.