Last May, I reported here on the emergence out of its stealth development phase of The Contract Network, whose goal is to “radically accelerate the time for contract negotiations” by providing an AI-powered collaboration platform that can be used by all parties to a transaction to more quickly “get to the point” in their negotiations.
Notably, the new company is led by CEO Jim Wagner, who has a track record of starting successful legal tech companies, and it came out of stealth having already partnered with the Mayo Clinic to build a solution to accelerate the negotiation of clinical trials agreements.
Now, The Contract Network has announced that it has raised $8 million in seed funding to further develop its AI-powered contract collaboration platform. The round was led by Tusk Venture Partners, with participation from Andrew Sieja, the founder of Relativity, The Legal Tech Fund, Mayo Clinic, Toba Capital, and GC&H Investments, an investment fund associated with Cooley LLP.
Tusk is a venture firm that invests solely in early stage startups in highly regulated industries. Cofounder and managing partner Bradley Tusk was political advisor to Uber in its early days, helping it navigate the regulatory process in key markets.
That background is critical, Wagner told me, because of the issues that lie ahead for the legal industry as artificial intelligence is more widely adopted. “He has a real appreciation for some of the challenges we as a company face and we as an industry face,” Wagner said.
Another of the investor’s in this round, Toba, was a core backer of Seal Software, where Wagner was president until DocuSign acquired the company in 2020. “They understand contracting, they understand contract AI, and they’ve been in it for the long run,” he said.
Invest in the Product
The company will use the funds raised in this round primarily to further develop its product, Wagner told me, so that he can get customers using the system and seeing its value.
“If we can do that, the go-to-market and the rest of it will take care of itself,” Wagner said. “We have to get people to really get value out of the product and to be in a position where they’ll say, ‘Yeah, if we had a chance to do this again, we would do it for sure and we encourage others to do it.'”
When I spoke to Wagner in May, the Mayo Clinic was live on the platform and he was aiming to get others live on the system by early summer. This week, he said that a number of users are now in the system, actively using it to negotiate agreements. They include a major pharmaceutical company and a private equity firm.
By next month, he expects to have the system become commercially available and customers paying to use it. For now, the two primary areas of market focus will be clinical trials and private equity, he said.
Collaborating on Contracts
As Wagner told me in May, “The concept behind the business is that B2B contract negotiation takes too long, and that businesses need a platform where both sides can collaborate to get deals done faster and to manage their compliance obligations.”
The Contract Network says its platform works by parsing out contracts into their individual clauses, turning agreements into “data from the first draft,” against which it uses generative AI to provide context and market insights for each change and redline. Stakeholders can collaborate on contracts in real-time and with full visibility into every change that is made with AI-powered translation from legal jargon to plain language.
The Contract Network works in concert with existing contract lifecycle management (CLM) platforms and also connects to the various software silos that typically exist in a typical contract negotiation.
Wagner was the cofounder first of DiscoverReady and then of Apogee Legal, an enterprise contract analytics platform. In 2018, Seal Software acquired Apogee, after which Wagner became president of Seal. In 2020, Seal was acquired by DocuSign, where Wagner became vice president of agreement cloud strategy. Since 2021, he has been founder and managing principal of Lean Law Labs.
The company’s partnership with Mayo on clinical trials was an ideal use case for the company to start with, Wagner told me in May, because so much is at stake in developing new medical treatments. Even so, the negotiation processes for clinical trial agreements are complex and time-consuming, leading to significant delays in the launch of clinical trials.
“The clear real-world application and need for an AI-powered collaboration platform is what attracted us to The Contract Network,” Jordan Nof, cofounder and managing partner of Tusk Venture Partners, said in a statement. “This platform will completely transform how businesses come together to get deals done faster across a wide variety of industries, also saving time and money as a result.”
Sieja, Relativity’s founder, said: “The Contract Network has enormous potential to fundamentally change how contractual agreements get done to save time and money while preserving the goodwill between parties. Its innovative approach allows for productive and rapid issue resolution, allowing parties to come to agreement and get to work. This positive impact on its participants and the company’s ambition to build a network serving millions has us excited to be involved.