Legal tech start-ups have raised $57 mn in funding since 2013: Report

Indian sector has more than 650 firms and is valued at $1.3 bn to be second biggest in the world

India’s legal tech start-ups raised $57 million in funding in the last decade. India has more than 650 legal tech start-ups and the sector is valued at $1.3 billion: less than 1 per cent the worth of the US market, according to a report by CIIE.CO.

The Indian sector, the second biggest in the world, is at the cusp of expansion. “Indians spend about 0.48 per cent of the GDP on litigation. Entrepreneurial drive aided by cutting edge technology can potentially tackle the inefficiencies found across the legal services landscape. While the sector is in its nascent stages, it is seeing strong tailwinds like the increasing digitalisation of court proceedings,” said Supriya Sharma, partner--insights, CIIE.CO.

The report, the first of its kind in India, defines legal tech as “technologies that enable and improve access and usage of legal services, including access to justice as well as development and delivery of these solutions by legal service providers.”

Funding for this sector began in 2013. Since then, 32 start-ups have raised over $57 million in 70 funding rounds until June 2022.

Almost $20 million in investments were made in the sector in 2021, the most in any given year. This was a result of Zolvit (formerly VakilSearch), a compliance solutions provider, raising a Series B round worth $10 million.

Legal tech solutions have disrupted existing processes and their funding rounds have been limited to early stages (angel, pre-seed and seed stage). The last three years have seen some growth-stage funding (Series A and Series B) come in as the sector gains momentum.

From Inefficiencies

·        Over 69,000 pending cases in Supreme Court of India.

·        There is one lawyer for every 951 residents in India

·        Per capita spending on legal aid in India is less than Rs 1.

·        Businesses have to comply with 69,233 aggregate compliances

Towards Improvements

·        1,369 Legal Tech patents were filed globally in 2019, highest at the time.

·        12,794 Legal Service Clinics operating in India as on December 31, 2021.

·        52,568 cases settled through mediation.

·        The Indian legal services market is projected to grow at a CAGR of 4.3% from 2022 to 2032.

◦ Series A funded start-ups: SpotDraft - Contract Management, SoOLEGAL - Marketplace (Service provider), and LegalDesk - Document Drafting

◦ Series B funded start-ups: Zolvit (formerly Vakilsearch) - Incorporation Management