Kira Systems, a Toronto-based developer of machine-learning software for contract review and analysis, today announced a $50 million Series A minority investment from Insight Venture Partners in New York City.

This is the first outside investment taken by the company, which was founded in 2011 by Noah Waisberg, a former corporate lawyer at Weil, Gotshal & Manges who is now CEO, and Dr. Alexander Hudek, a computer scientist who is now CTO.

Waisberg and Hudek retain majority control of the company. Insight managing partner Peter Sobiloff will join the Kira board and Insight senior associate Jonathan Rosenbaum will act as a board observer.

Waisberg would not say the percentage of the investment or the valuation on which it was based, but this gives the seven-year-old company a valuation somewhere above $100 million.

Kira has seen notable growth in just the last year. In 2014, when I first wrote about the company (then called DiligenceEngine, it had four employees. At the start of 2017, it had grown to 35. In the 20 months since, it has expanded to 115 employees and has another 17 open positions listed on its website.

Expand the Product

Some of the $50 million is a secondary investment that will be used to pay current investors, including Waisberg, who told me yesterday he used the bonus money he earned as a law firm association to help start the company.

The majority of the investment will go to the company and will be used to expand the capabilities of the company’s product.

“We think we have a pretty good product,” Waisberg says. “We think there’s a lot of opportunity to push the product farther still. If we can, that will open a lot of opportunities for us to expand. We’re going to try to push it a level beyond where it is right now.”

Kira’s core product is machine-learning software that automatically identifies and extracts information from contracts and other documents. It is primarily used for due diligence contract review, where the company says it reduces review time by 20 to 90 percent and improves review accuracy. It is also used for other forms of contract and lease analysis.

Waisberg believes the capabilities of and use cases for the product can be greatly expanded by making the software even more accurate and granular. The more quickly the software can review a contract, the more contracts it can review, Waisberg says, and that opens opportunities for law firms and professional services firms “to find answers to questions they didn’t know to ask.”

The problem for many companies, he says, is that they have many contracts but do not know what all those contracts say. “There is a huge opportunity for us to help companies get that data and get insights into that data.”

Focus on Growth

The investor, Insight Venture Partners, focuses on growing revenue and profit for software companies. It has over $20 billion of assets under management, has invested in more than 300 companies, and has completed more than 200 M&A transactions for its portfolio companies, according to its website.

Waisberg says he wanted to work with Insight for a number of reasons and turned down higher investments in order to do so (although Insight offered at a higher valuation than others). One major reason was that Insight has a lot of experience with companies that serve large enterprise companies. And it has a track record of taking those companies from Kira’s size to companies of 600-plus employees.

Also, Waisberg said, after having sat through many cookie-cutter investment calls, Insight stood out for its knowledge. “Talking to them, I found that I would learn things about the industry that I didn’t know.”

In a press release, Insight’s Sobiloff said his firm was impressed with Kira’s performance as a bootstrapped business. “We don’t see many pure-play AI businesses with their traction, and this success has come from the fact that Kira is fundamentally changing how contracts are reviewed. This represents an opportunity to make a meaningful impact across their core market segments.”

And In other Waisberg News …

As if a $50 million investment wasn’t enough excitement for one day, Waisberg had something else happen yesterday that he was was even more exciting — the birth of his third child, a girl. Congratulations to him and his family.

Photo of Bob Ambrogi Bob Ambrogi

Bob is a lawyer, veteran legal journalist, and award-winning blogger and podcaster. In 2011, he was named to the inaugural Fastcase 50, honoring “the law’s smartest, most courageous innovators, techies, visionaries and leaders.” Earlier in his career, he was editor-in-chief of several legal publications, including The National Law Journal, and editorial director of ALM’s Litigation Services Division.