Legal tech startup Ex Parte raises $7.5M in funding to predict litigation outcomes and disrupt the $250 billion market using AI and ML
Every year, corporations spend over $250 billion on litigation in the US. That’s about 33% of Fortune 500 after-tax profits. However, critical legal decisions are largely made the same way they were 100 years ago. Every major industry, from finance and telecom to insurance and manufacturing, has been transformed by the big-data revolution, but the field of law has lagged far behind.
Enter Ex Parte, a Washington, DC area-based software-as-a-service (SaaS) legal-tech startup that uses artificial intelligence and machine learning to predict the outcome of litigation and recommend actions that customers can take to optimize their odds of winning.
Today, Ex Parte announced it has raised $7.5 million in Series A funding to expand its engineering team and invest in sales and marketing initiatives to further scale new customer growth. The round was led by R8 Capital, an investment firm founded by Bruce Rauner, the 42nd governor of Illinois and former chairman of private equity firm GTCR, and Ironbound Partners.
Ex Parte is the world’s first company to leverage artificial intelligence and machine learning to predict the outcome of litigation and recommend actions that its customers can take to optimize their odds of winning. The company’s patented Prediction Engine™ forecasts the outcome of cases with approximately 85% accuracy, and its patented Recommendation Engine™ generates data-driven recommendations such as whether to litigate or settle, which claims to assert, where to file or defend a lawsuit, and which attorneys and law firms will provide customers with their best chance of success given their case-specific factors.
“There are many technical and conceptual challenges associated with building a robust model of a lawsuit,” said founder and CEO Jonathan F. Klein. “Legal data is by its nature disparate, unstructured, and semantic. We have solved these problems by combining a highly specialized understanding of the legal field with advanced expertise in artificial intelligence, machine learning, and natural language processing.”
“Our mission is to be the leading worldwide provider of data-driven decision-making solutions in the field of law and provide our customers with a winning advantage,” continued Mr. Klein. “Think of us like Moneyball, but for a market more than 20x the size of Major League Baseball. We are grateful for the support of our incredible investors, which will allow us to accelerate our growth plans and fulfill our ambitious mission.”
Joining Gov. Rauner and Mr. Ledecky in the financing round are an all-star group of co-investors, including: Jeong Kim (executive chairman, Kiswe Mobile & former president, Bell Labs); Viet Dinh (chief legal & policy officer, Fox); Craig Coben (co-head global capital markets & former vice-chairman, Bank of America Merrill Lynch); Allen Morgan (founder & CEO, Idealab NY); Auren Hoffman (CEO, SafeGraph); Mark Ein (CEO, Venturehouse Group); Keith Lemer (CEO, WellNet); Thomas Spahr (president, Libra Ventures); Wolf Ruzika (chairman, EastBanc Technologies); Brett Bossung (co-founder, Silverpeak); Richard Wiedis (partner, Diaz, Reus & Targ); and Gregory Lubar (vice chairman, JLL).
Prior to founding Ex Parte, Mr. Klein was president & chief legal officer of MicroStrategy (Nasdaq: MSTR), the largest independent publicly-traded analytics and business intelligence company. Before MicroStrategy, he served as an appellate litigator with the United States Department of Justice, and a law clerk for the Hon. Jerome Farris of the United States Court of Appeals for the Ninth Circuit. Mr. Klein received a B.A. in Economics from Amherst College and J.D. from Harvard Law School.
Ex Parte’s customers and prospects include corporations, hedge funds, law firms, insurance companies, litigation finance firms, and universities.