Great analysis of LegalTech investment in 2022. Compared to prior year, 2022 saw a steep drop in LegalTech investments, similar to what the general tech market experienced as a whole.

In 2022, the total funds raised amounted to $3.43 billion composed of 376 deals in total, raised by 849 investors. Compared to 2021 the total raised saw a 34% drop, and the number of deals were down 7%. The average funding, which amounted to $9.1 million in 2022, was also down 30% from the previous year.

Hardest hit were Contract Lifecycle Management and eDiscovery companies – which had raised at massive multiples in 2021 as “hot sectors.”

Predictions are that there will be a mass extinction event for early-mid stage tech companies generally in late 2023/2024 – as those companies run out of funds. LegalTech will not be immune. Best advice from a variety of US VCs is to make sure you have runway for at least 24 months (or start making profits).

On that happy note – have a great weekend 😃



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