Legal AI start-up Legora seeks funds at more than $10bn valuation

Legal AI start-up Legora is looking to raise funds at a valuation roughly double the $5.6bn it achieved only four months ago in a sign of the intense interest in artificial intelligence companies powering professional services.

Legora is in the early stages of discussions with investors at a valuation of at least $10bn and could include the company raising new money as well as selling existing shares, according to people familiar with the financing.

The Swedish start-up offers lawyers and in-house legal teams tools to review and draft documents, speed up due diligence and keep on top of regulations. Its customers include law firm Linklaters, consultants Deloitte and brewer Heineken.

Its main rival is US start-up Harvey, which is reportedly in talks to raise funds at a valuation of about $15bn.

Law firms are jostling to get ahead of the AI race, with some opting to build their own models rather than relying on third parties. Kirkland & Ellis, the world’s largest law firm, said in May that it would build its own AI platform instead of relying on tools available to competitors. The US law firm has partnered with tech groups including Palantir.

However, Legora chief executive Max Junestrand told the FT in June that he did not think it was “a buy or a build” decision and that firms should just “utilise the best stuff that exists”.

He is attempting to position Legora as a European AI champion in the face of so many dominant US AI players.

Legora is growing rapidly, having increased its annual recurring revenue by 50 per cent to $150mn in the second quarter this year compared with the first. It is also planning to more than double its employee numbers from 700 to 1,500 by the end of the year as its customers, such as law firms and in-house legal teams, have risen by a quarter to 1,500 in three months.

Sweden has become one of the AI hotspots in Europe with Lovable, the “vibe-coding” start-up which promises to make app programming as easy as writing a few sentences, this week raising $400mn at a valuation of $13.3bn amid explosive growth.

Large Silicon Valley venture capital firms such as Sequoia and Andreessen Horowitz have been in Stockholm recently eyeing up potential investments, especially in AI, according to local investors.

“There are suddenly a lot of Swedish decacorns [start-ups valued at more than $10bn]. It is one of the hottest places in Europe right now,” said one Swedish investor.

An executive with experience from multiple Stockholm start-ups added: “The venture capital firms were here when Spotify and Klarna went big. Then it went a bit quiet for a few years. Now they’re here all the time again.”

Legora, which was founded in 2023 and counts Benchmark, Accel, Bessemer, Iconiq and General Catalyst among its investors, declined to comment. People familiar with the financing said it was “early days” and the terms could change. One investor said the valuation could be as much as $11bn-$12bn.

Investors in Sweden said they expected some interest from the biggest US tech groups in trying to buy some of the local start-ups. Sana, a Swedish enterprise AI group, was bought by Workday for $1.1bn last year. “Lovable and Legora are getting so big that only the largest companies can afford them,” added one investor.

Sweden’s broader business community, led by the Wallenberg family of industrialists, signed a deal last year with Nvidia, the world’s most valuable company, to build new AI infrastructure including a supercomputer and technology centre.

Additional reporting by Suzi Ring in London