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For lawyers and the organizations that employ them, time is quite literally money. The business of contract management software is all about helping to optimize that process, reducing the time and money it takes to understand and manage contracts.
As it turns out, there is big money in the market for contract management software as well. An increasingly integral part of the business is the use of AI-powered automation. To that end, today contract management vendor Evisort announced that it raised $100 million in a series C round of funding, bringing total funding to date up to $155.6 million.
Evisoft was founded in 2016 and raised a $15 million series A back in 2019. The company was founded by a team of Harvard Law and MIT researchers and discovered early on that there was a market opportunity for using AI to help improve workflow for contracts within organizations.
“If you think about it, every time a company sells something, buys something or hires somebody, there’s a contract,” Evisort cofounder and CEO Jerry Ting told VentureBeat. “Contract data really is everywhere.”
Contract management is a growing market
Evisoft fits squarely into a market that analysts often refer to as contract lifecycle management (CLM). Gartner Peer Insights lists at least twenty vendors in the space, which includes both startups and more established vendors.
Among the large vendors in the space is DocuSign, which entered the market in a big way in 2020 with its $188 million acquisition of AI contract discovery startup Seal Software. Startups are also making headway, with SirionLabs announcing this week that it has raised $85 million to help add more AI and automation to its contract management platform.
The overall market for contract lifecycle management is set to grow significantly in the coming years, according to multiple reports. According to Future Market Insights, the global market for CLM in 2021 generated $936 million in revenue and is expected to reach $2.4 billion by 2029. MarketsandMarkets provides a more considerable number, with the CLM market forecast to grow to $2.9 billion by 2024.
Ting commented that while every organization has contracts, in this view many organizations still do not handle contracts with a digital system and rely on spreadsheets and email. That’s one of the key reasons why he expects to see significant growth in the CLM space as organizations realize there is a better way to handle contracts.
Integrating AI to advance the state of contract management
Evisoft’s flagship platform uses AI to read contracts that users then upload into the software-as-a-service (SaaS)-based platform.
Ting explained that his company developed its own algorithm to help improve natural language processing and classification of important areas in contracts. Those areas could include terms of a deal, such as deadlines, rates and other conditions of importance for a lawyer who is analyzing a contract. Going a step further, Evisoft’s AI will now also analyze the legal clauses in an agreement.
“We can actually pull the pertinent data out of a contract, instead of having a human have to type it into a different system,” Ting said.
Once all the contract data is understood and classified, the next challenge that faces organizations is what to do with all the data. That’s where the other key part of Evisoft’s platform comes into play, with a no-code workflow service. The basic idea with the workflow service is to help organizations collaborate on contract activities, including analysis and approvals.
What $100M of investment into AI will do for Evisoft
With the new funding, Ting said that his company will continue to expand its go-to market and sales efforts. Evisoft will also be investing in new AI capabilities that Ting hopes will democratize access to AI for contract management.
To date, he explained that Evisoft’s AI works somewhat autonomously based on definitions that Evisoft creates. With future releases of the platform, Ting wants to enable users to take Evisoft’s AI and adjust and train the algorithm for specific and customized needs. The plan is to pair Evisoft’s no-code capabilities into the future feature, in an approach that will make it easy for regular users and not just data scientists, to build AI capabilities to better understand and manage contracts.
“I think the 100 million dollar mark tells the market, hey, this company is a serious player and they’re here to stay,” Ting said. “It’s a scale-up, not a startup.”
The new funding round was led by TCV with participation from Breyer Capital as well as existing investors Vertex Ventures, Amity Ventures, General Atlantics and Microsoft’s venture capital fund M12.
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