Legal tech investment receded in the second quarter without a blockbuster transaction and a drop-off in the U.K., a Bloomberg Law analysis found.
The fall from $400 million to $122 million was largely attributable to a $200 million investment in the last period to business enterprise software company Onit from the private equity firm K1 Investment Management.
Onit officials have said they plan to use the funds in part to accelerate new product development and enhance existing product offerings.
The Bloomberg Law analysis was based largely on data from companies designated as “legal” by Crunchbase, and from investments or mergers in which the investment amounts were made public.
Financial details regarding some deals in the second quarter have remained undisclosed, including the the Big Four accountancy EY’s acquisition of legal managed services firm Pangea3 from Thomson Reuters.
Litify, a practice management tech company, received the top second quarter investment disclosed by Crunchbase, $50 million from Tiger Global Management.
The alternative legal services provider Elevate continued to appeal to outside investors, according to the Bloomberg Law analysis, as it received $25 million from Kayne Partners.
Elevate has also continued its own acquisition streak, including the purchases of legal talent provider Halebury, and managed services company Yerra Solutions. This followed Elevate’s well-publicized purchase of the legal artificial intelligence consulting group LexPredict.
About $85 million was invested in the legal tech sector in the United States in the second quarter, more than in any other country, the analysis found. The U.S. also dominated the sector in the first quarter, including the Onit investment, with a total of 13 funding rounds that accounted for $332 million in disclosed funding.
The $15 million invested in 164, a Chinese legal services and information company, elevated China’s legal tech sector into the top tier of such activity by country.
Legal tech investment figures In the U.K. dropped from $48.9 million in the first quarter to $5.5 million in the latest period. But things are looking up this week with a $55 million Series B investment to British contract lifecycle management software company ContractPod Technologies.
That investment was made by Insight Partners, a New York-based venture capital and private equity firm.
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