With Harvey and Legora Through eight-figure funding rounds, Legal Tools has proven to be one of the fastest-growing and most hotly contested verticals among AI startups. But while those tools focus on private practice, some startups believe there is still a lot of legal market that is not being served.
Sandstonewhich announced $30 million in Series A funding on Tuesday, is focusing on an overlooked portion of the legal space, zeroing in on the tangle of overlapping tasks and systems faced by in-house legal teams.
The Series A was led by Lightspeed Venture Partners, with participation from existing investors at 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 seed round in January, led by Sequoia.
As described by the founders, Sandstone’s initial user base will be the legal departments of small and medium-sized businesses.
“You open your laptop in the morning and see all the work coming in through different inbound channels, whether it’s Slack messages, emails, Jira,” co-founder and COO Jarryd Strydom told TechCrunch. “AI helps them route and classify that work appropriately, and then they can create custom workflows on top of our platform to execute the work, whether it’s drafting, reviewing, or providing legal analysis.”
The result has little in common with systems of legal reasoning like that of Harvey and Legora. Instead, Sandstone focuses on relationship management and workflow automation, both tailored to the unique demands of in-house legal work. As Strydom sees it, the focus on internal legal departments allows Sandstone to deliver value where more widespread AI implementations often fail.
“One of Lightspeed’s beliefs was that they really believe in highly specialized vertical AI,” says Strydom, “because you need a granular understanding of workflows to really determine how AI can help.”
Sandstone will also face stiff competition from cutting-edge AI labs, which are increasingly turning their attention to the legal space. Anthropo has been constantly expanding its Claude for Legal offering, adding new tools in May for case law searches and deposition preparation.
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