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Kira Inc., a Toronto artificial intelligence software firm that helps cut much of the drudgery of legal contract review, has raised US$50-million from New York venture capital giant Insight Venture Partners. The deal values the seven-year-old startup - which is believed to generate about $20-million in annual revenue and doubling year over year - at more than US$100-million and is one of the largest investments in Canada’s teeming AI sector this year.

It is also the first time Kira, founded by former New York mergers & acquisitions lawyer Noah Waisberg and University of Waterloo computer science PhD Alexander Hudek, has tapped outside financing, coming after they signed up four of the seven top-ranked law firms in Canada – the so-called “Seven Sisters” – as customers, as well as a majority of the top-ranked law firms in both the US and Canada. More than 5,000 Deloitte professionals around the world also use its software to review lease documents.

“We like companies that are growing well in their respective markets with leadership positions that have fundamentally good unit economics,” said Jonathan Rosenbaum, a senior associate with Insight – which previously backed Canadian software firms Shopify and Hootsuite. He added Kira “as far as we know is the largest company with the fastest growth rate” among AI software firms selling into the legal market and has “best-in-class” retention among all subscription software firms, with more than 95 per cent of customers renewing their contracts.

Other competing “legaltech” firms that have raised venture capital financing include California-based Seal Software, and British firms Luminance and Eigen Software Ltd.

With Kira’s software, lawyers can search for key terms, concepts or provisions within massive volumes of legal documents such as leases and contracts, allowing them to quickly analyze or compare terms and respond to changes in the law or deal terms, and to pull terms into review or renewal documents. Kira says lawyers can save between 20 and 90 per cent of the time it takes to manually review documents, while decreasing the amount of human error that comes from poring over the dense texts. The company sells its software as a product that is easy for lawyers to implement themselves – and that helps lawyers improve their performance, not replace them.

“It has improved the timeliness and quality” of diligence work that Torys LLP performs for clients, said Elizabeth Ellis, the law giant’s director of practice solutions, adding the firm has used Kira since 2014. “It has enabled us to provide a kind of diligence review that would not be available without the product,” while providing lawyers to provide large corporate clients with more immediate and regular feedback.

Mr. Waisberg, a 40-year-old Toronto native who previously worked for New York law giant Weil Gotshal & Manges, set out in 2011 to build a company that addressed a persistent problem he says he encountered reviewing contracts as a lawyer: Lawyers spent massive amounts of time reviewing contracts, they were prone to human error and the task was repetitive. After Mr. Waisberg met Mr. Hudek through a contact at University of Waterloo, the two decided to build software, using machine learning to help sift through large legal documents to pinpoint and extract information that was most relevant to law firms and their clients.

Mr. Waisberg gave up a US$300,000 salary and, along with Mr. Hudek, put up a few hundred thousand dollars of their own money to finance development until the software was ready in 2013. That year the founders hired two more employees and generated their first sales, and by the end of the following year were generating enough revenues that the founders could start drawing modest salaries and stop funding the company themselves. By the end of 2016 they had 35 employees. Today it has 115 workers and close to 100 clients.