SoftBank-backed LegalOn raises $50M to expand AI tools and transform legal workflows

LegalOn Technologies, a Tokyo-based startup backed by SoftBank, has secured $50 million in Series C funding to advance its AI-driven legal workflow solutions. The company’s focus remains on streamlining contract review, a process that has long been slow and labor-intensive for legal teams, requiring meticulous analysis of complex language, risk identification, and translation of legal terminology. LegalOn’s AI-powered contract review software, Review, is already adopted by 7,000 organizations across Japan, the U.S., and the U.K., according to the company. It holds a 25% market share in Japan, with a majority of the country’s public companies using its platform. The startup aims to expand its offerings by developing AI agent tools to complement its existing software, leveraging the fresh capital for innovation. The Series C round, led by Goldman Sachs’ growth equity fund, included participation from existing investor World Innovation Lab (WiL) as well as new backers such as Mori Hamada & Matsumoto, a Japanese law firm, and banks Mizuho and Shoko Chukin. The funding will also support LegalOn’s growth in the U.S. and U.K., where its business has grown fourfold in the past year. Founded in 2017 by former corporate lawyers Nozomu Tsunoda and Masataka Ogasawara, LegalOn targets time-consuming tasks in legal workflows, including organizing requests and automating contract management. CEO Daniel Lewis emphasized the company’s unique approach, which relies on attorney-drafted legal content rather than generic AI models or user-created rules. This foundation, he said, ensures higher accuracy and practicality for legal teams. LegalOn’s Review tool claims to reduce contract review times by up to 85% while improving quality. It uses playbooks built by legal professionals and tailored to each client’s standards, enabling automated risk identification and edit suggestions. The company recently launched Matter Management, a tool to track contract requests, assign responsibilities, and facilitate cross-department collaboration. A non-equity partnership with OpenAI grants LegalOn access to the firm’s cutting-edge models, allowing its engineers to work closely with OpenAI’s team. “This collaboration accelerates our development of advanced AI agents by grounding them in our proprietary legal expertise,” Lewis explained. Despite the rapid growth of generative AI in the legal sector, Lewis stressed that the technology will not replace lawyers. “AI isn’t ready to fully substitute human judgment, and that’s not our goal,” he said. Instead, he highlighted that lawyers who use AI to enhance their work—such as overseeing, editing, and applying expertise—gain significant efficiency. LegalOn’s total funding now exceeds $200 million, with investors including SoftBank Vision Fund, HSG (formerly Sequoia Capital China), Japanese venture firm JAFCO, and MUFG Bank. The company has positioned itself as a key player in the legal tech space, capitalizing on the demand for AI tools to address inefficiencies in contract management and review. As the legal industry increasingly adopts AI, startups like LegalOn are redefining how legal professionals handle tasks. While the sector faces competition from firms such as Harvey AI and Clio, LegalOn’s emphasis on combining specialized legal knowledge with advanced AI models sets it apart. The latest investment underscores its commitment to innovation while maintaining its role as a critical enabler for legal teams navigating the complexities of modern contract processes.