Sequoia Leads Backing of AI Legal Technology Startup Sandstone

Sandstone, an AI legal tech startup that aims to connect corporate legal departments with other parts of the business, is publicly launching Tuesday with $10 million from leading legal technology funder Sequoia Capital and other investors.

Sandstone, co-founded by former corporate legal consultant Nick Fleisher and former in-house attorney Jarryd Strydom, says it will use AI to bring data from human resources, sales and other departments to the legal team. Additional insight into the broader business will keep in-house lawyers better informed of strategic goals and make them more efficient, Sandstone says.

Though the legal tech market has been active, corporate legal departments, particularly small and midsize ones, have yet to become a big beneficiary of the boom, Fleisher said. Companies like GC AI and Spellbook are specifically targeting in-house teams, but Fleisher said they don’t go as far as Sandstone does in building in broader business context for the legal team.

Sandstone’s launch comes as legal teams are viewing 2026 as the year AI implementation better aligns their departments with the strategic goals of their companies.

Sequoia has been a major driver of legal tech activity, having been an early investor in Harvey, now worth $8 billion, as well as the contract management software maker Ironclad and the AI-powered law firm Crosby. The fact that the venture capital giant led Sandstone’s seed funding round is a reflection of the size and strength of the legal tech market, said Bogomil Balkansky, a partner at Sequoia.

“Legal tech actually is shaping up to be a very interesting and a very large software market, and that’s why we’re very comfortable having multiple bets,” Balkansky said.

Sandstone

Corporate legal departments, especially smaller ones, are an attractive market for selling legal tech because they tend to be overworked, Balkansky said.

In addition to Sequoia, the venture funds SV Angel and Kearny Jackson and more than 20 general counsel invested in Sandstone, the company said. Sandstone has a “couple dozen” paying customers, said co-founder Fleisher, who formerly consulted at McKinsey & Co. The customers are a mix of smaller legal departments and a couple Fortune 500s, he said.

Steve Ucci, general counsel at manufacturer Hypertherm Associates, said in a statement that Sandstone will help automate routine tasks and provide insight that the in-house team didn’t previously have access to.

“We aren’t just working faster; we’re finally able to manage our department with the strategic precision the business expects,” Ucci said.

Instead of a convoluted web of Slack messages and emails coming from HR, sales and other parts of the company, Sandstone says it brings requests and business context into one place. It can identify what kind or request is coming in, such as approval of a sales agreement or new hire contract, gather context about that request from other systems like Salesforce, and apply relevant contract playbooks to start drafting agreements, Fleisher said.

“We can basically give the legal team the data that they need to understand the strategy behind the thing they’re looking at,” he said. “So no longer are they waiting and being reactive to the things that they’re getting asked, but they can actually think, ‘How can I move sales deals faster? Is this a critical deal to spend time on versus this one? Do we need to hire and onboard this person now versus next week?’”

It’s the kind of tool for the legal department that developers have had in Jira and HR has in Workday, Fleisher said.

Sandstone determines which large language models are best for different legal uses, including OpenAI’s GPT and Anthropic’s Claude. The idea is to get AI into the hands of in-house attorneys without asking them to master how to prompt AI tools.

“I worry that we’re trying to get lawyers to be amazing prompters and ask them to pick models and decide on all of that, but it’s actually really complicated,” Fleisher said. “And you know, no one human is going to be perfect at that.”