Australian legal technology start-up LawPath has raised capital from US private equity-backed online legal services giant LegalZoom, which will see the world’s largest legal tech player partner with the Aussie firm for Asian expansion.
LawPath was founded in 2013 and has grown to provide legal services to 60,000 local clients, mainly in the start-up sector, who use it for legal tasks such as starting a business, registering trademarks and creating legal documents. It has also evolved to become an online marketplace where legal firms pitch for work submitted by prospective clients.
LegalZoom will now own an undisclosed percentage of the business, in exchange for a $1.8 million investment, which will also involve it providing LawPath with strategic guidance, including technology expertise, marketing insights and assistance with LawPath’s expansion plans across Australia and into international markets.
LawPath chief executive Dominic Woolrych said LegalZoom had served as a model for LawPath when it was first conceived and that its funding would be targeted at marketing and advertising to capitalise on a potential market of 2 million small to medium-sized businesses.
LawPath provides legal services to 60,000 local clients, mainly in the start-up sector. Karl Hilzinger
He said LawPath was currently attracting 2000 new clients a month and had been growing at 10 per cent month-on-month for the last 15 months. While it was not yet profitable it has experienced rapid revenue growth, and it intends to use LegalZoom’s 17 years of experience as an unofficial playbook to corner the Australian market.
LegalZoom was valued at over $US400 million following a $US200 million investment by US private equity firm Permira. Mr Woolrych said it had sold into the US market to almost saturation levels, and was viewing its involvement with LawPath as the first stages of its Asian expansion plans.
“They have totally dominated the US market. So for us to be able to go to them for advice on whether things will work or not is like having a cheat sheet to bring to Australia and replicate their success,” Mr Woolrych said.
“The last two years has been about getting the product up to scratch, and now we want to take it beyond start-ups to everyone now … the bricks and mortars, the mums and dads, the guy at the 7/11, because they are the ones that will really get the benefit.”
LawPath has partnered with top tier Australian law firm Norton Rose Fulbright to offer other start-ups a cut-price option to get the legal side of raising capital and expanding their business in order. However since expanding to become a broader legal online hub, it has aspirations of providing services to all kinds of companies.
Asked whether its involvement with LegalZoom would preclude LawPath from ever expanding into the US in its own right. Mr Woolrych said it was unlikely to be an option in the near future as it focused on Australia, Asia and then potentially Europe. He said LegalZoom would not stand in its way and conceded that the investment could potentially be a precursor to a future acquisition.
“That is not off the table, it is an option and obviously we want to keep our options open, but it is definitely an option that has been left on the table,” he said.
He said the fresh funding would give LawPath a “runway” of about 12 to 16 months, before any further external investment would be required. It already has investors including LexisNexis, Norton Rose Fulbright partner Nick Abrahams (who co-founded the company), the family office of former News Corporation executive Alasdair MacLeod Macdoch Ventures, Adcock Private Equity and a syndicate led by Ben Keeble of Fort Street Advisors.