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- Athennian, a legal entity management platform, raised $7 million CAD in a Series A extension.
- The extra capital was needed after a surge in demand from law firms and legal departments.
- Adrian Camara, Athennian’s CEO and founder, walked Insider through its Series A pitch deck.
- See more stories on Insider’s business page.
Athennian raised $7 million CAD in its Series A extension
Athennian, which helps law firms and legal departments manage data and workflow around legal entities, raised a $7 million CAD (more than $5.5 million USD) Series A extension in the beginning of March, nearly doubling its initial $8 million Series A round last year.
The Canada-based legal tech startup raised the extension because the COVID-19 pandemic accelerated the company’s demand and growth. Athennian’s revenue and headcount more than doubled since the original Series A, according to founder and CEO Adrian Camara. He declined to disclose revenue numbers, but said that the sales and marketing team grew from 35 people in September to around 70 in March.
Launched in 2017, Athennian is used by nearly 200 legal departments and law firms, including Dentons, Fastkind, and Paul Hastings, to automate documents like board minutes, stock certificates, and shareholder consents.
The Series A extension was led by Arthur Ventures. New investors Touchdown Ventures and Clio’s CEO, Jack Newton, also participated in the round, alongside Round13 Capital and other existing investors. To date, Athennian has raised $17 million CAD, or around $14 million USD, in venture capital funding, per Pitchbook.
Athennian helps companies manage entity data and automate documents
A former corporate lawyer, Camara remembers staying up an entire night to redo all the paperwork for a large deal. The problem? There were errors in the entity names — across hundreds of documents.
“I was Control+F-ing all night,” Camara said. “It boiled down to a data management problem.”
Large corporations can have thousands of entities. As a legal entity management platform, Athennian centralizes information about these entities into a cloud-based system, and also automates tasks and corporate tax or finance documents related to the company.
In the old way of doing things, information about entities and workflow are scattered across various locations, from old software systems to binders and spreadsheets.
“It creates tons of friction and risk,” Camara said. “Transactions can be delayed by months or years if the entity structure has not been properly maintained.”
Failing to properly manage corporate structures can also lead to other huge setbacks for companies. Facebook was forced to shutter several Irish holding companies in December after the US Internal Revenue Service said the company owed $9 billion in taxes. Facebook would’ve at least minimized its risk of tax liability had it properly set up and maintained its entity structures, according to Camara.
Camara sold investors on Athennian’s cutting-edge technology
Camara used this slide to show how cutting-edge Athennian’s software is, even compared to a relatively young company like Netflix.
“This is a super effective slide to convince anybody why we’re doing so well,” he said. “There’s an existing market of people already trying to manage their entities. They’re already making investments into them because they have to — the existing software is just so terribly old.”
500,000 new entities were formed in the US in 2020 alone, making it difficult to manually manage the workflows around the web of directors, officers, and shareholders of a company, according to Camara. Athennian uses artificial intelligence technology to automate document creation to expedite deals and transactions.
Athennian also offers integrations with Google Drive — where customers store on average 20,000 documents — and DocuSign, complementing its services and further expanding its customer base, said Camara.
Athennian needed a Series A extension following a surge in demand
While Athennian can’t disclose specific numbers on revenue, Camara said there’s been a surge in both the number of active entities and annual recurring revenue in the past year. The number of entities stored in the platform, denoted by the red line in the graph, is close to 200,000.
Athennian’s spike in new users came after many companies recovered from the initial shell shock of the pandemic and began to look for software tools to help their business practices, according to Camara.
Camara wants to double Athennian’s revenue year-over-year
The total addressable market (TAM) for software in North America was $2.5 billion in 2018, while the TAM for corporate secretarial (CoSec) services — the core market for Athennian — was $835.5 million in 2017 and projected to hit $1.44 billion by 2025.
Professional services firms like the Big Four and large law firms like Dentons and Baker McKenzie provide corporate secretarial services, and use legal entity management software services like Athennian to manage information about their large corporate clients. There are about 5,000 law firms that have a corporate legal practice, per Camara.
“The data is all being managed,” he said. “It’s just a question of whether it’s being managed well or not.”
Camara likens the market dynamics of legal entity management to those of eDiscovery. “You get lots of viral hooks, where either a service provider gives access to a corporate customer, who then subscribes to the platform, or vice versa,” he said. “As we get through the year, we’re going to be exposing more and more of that and starting to accelerate that flywheel.”
Athennian can become a multibillion dollar company, according to Camara, who wants to double revenue and the number of entities under management year over year. By storing information about private corporations, Athennian can also offer insights into data like board diversity, becoming an important resource of information for these companies.