The use and application of technology and software in the legal environment, also known as LegalTech, will not grab as many news headlines as the case of Fintech or Smart Cities, to mention two of the most active fields in terms of media coverage and attention. Valencian LegalTech startups are ready for the boom of the sector.
However, there are numerous indications that point to the consolidation of this segment of the market and the huge opportunities available for startups to operate in it.
Valencian LegalTech startups
For that reason, here at Startup Valencia, we have gathered together this local selection of LegalTech startups that are driving the digital revolution and innovation in a sector strengthened by large leading law firms. These include Aktion Legal Partners, DWF-RCD or Metricson, in addition to providers of legal services such as Orts Consultores and Innova.Legal who provide legal solutions of a high added value to the Valencian entrepreneurial and technological ecosystem.
The digitalisation of service is the starting point: Declarando, TuGesto, Adera LegalTech and Gromi
At this stage of the century, interacting with a digital interface may be familiar and we may associate what is ‘truly innovative’ with terms like blockchain or smart, to give an example.
The digital revolution is hitting us at breakneck speed and, what was new a decade ago, let’s use Facebook as the social network of the time, now struggles to attract the younger generations.
Digital transformation is a process which encompasses both companies and consumers who end up adopting the solutions that are poured onto the market, and which are constantly evolving.
In the context of LegalTech, as a first level of digitalisation, we can establish the transformation of the traditional way in which legal services are provided and consumed. This is the case with Valencian startups Declarando, TuGesto and Adera LegalTech, which have been able to take advantage of IT capabilities to automate repetitive manual processes (sending invoices, settlements, tax formalities…) and, providing a better user experience to solve the day-to-day problems, capture a customer base with which to develop their business, also providing traditional consultancy services.
Valencian LegalTech startups
The demand for innovative solutions in the LegalTech field is ever-increasing. “Without a doubt, we are experiencing a boom in demand, especially in Valencia, which almost always encompasses the legal area. It is extremely important for us to get moving on the digitalisation of processes and explore new solutions that are in demand. If we don’t, there will continue to be friction for talent and international investment” confirms Andrés Nieto, founder and Chief Growth Officer at Gromi, a Valencian startup which helps international companies and entrepreneurs to set up and grow their businesses in Spain.
Perhaps some people may think this sounds simple, but it is a growing market as described by the Financial Times in its article ‘The Battle to Win at Legal Tech’. “Suddenly, these small software companies for law firms and professionals are competing with large law firms who, until now, dominated consultancy services”, according to the article.
It is these “big opportunities that are still there to be taken in Saas B2B” that Enrique Penichet (Draper B1) was referring to when he spoke to us about sectors that currently take precedence for venture capital funds to invest in.
New business models as a test of maturity: Bounsel and Query Layer
If digitalising an existing service is the first layer of transformation, the emergence of products that don’t have an offline equivalent is the utlimate litmus test of a technology vertical.
These startups are the ones that tear up the rules of the game, in which large sums of money are invested, they are acquired by players with more muscle, and end up being the protagonists of well-known sales or being floated on the stock exchange.
These are all signs that have already been produced in the LegalTech segment. For example, the case of Clio, the latest unicorn of the Canadian entrepreneurial ecosystem, listed on the Nasdaq, DocuSign, or looking more towards neighbouring ecosystems, the Barcelona based Signaturit.
Although still in another division, more consistent with their investment and years of existence, it is the same discipline in which Valencian LegalTech startups Bounsel and Query Layer compete. Purely digital solutions, with a high technological component and obsession with continuously polishing the user experience from the product.
The numbers back it up, with a 2019 in which it only took 9 months to break the 2018 record for investment, exceeding the 1.2 billion dollars invested in LegalTech companies and which, according to Forbes, can no longer be considered as fintech’s awkward younger sibling, but is now a lucrative market of its own.
Specifically Krzysztof Szypillo, co-founder of Query Layer, (sustainable and scalable management of customers’ personal data) recently told Startup Valencia how our ecosystem has become “one of the main European destinations for digital nomads or simply professionals who, during the pandemic, have wanted to swap the major cities like London or Paris for a city that can offer them a better quality of life”
Attracting talent, opportunities to develop that talent and capital to expand it, a combination that makes startups successful, especially if the wind direction of the market is favourable as in the LegalTech sector. With the aim of promoting the development of the Valencian LegalTech ecosystem to make the sector more competitive as a leading technology hub, here at Startup Valencia, we have created the LegalTech Hub.
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