Contracts drafted at a click
Contracts govern important business relationships. Businesses spend hours on drafting and negotiating these. Nitish V, an interior designer, had faced similar problems while trying to manage billing, reminders, payments and working at the same time. Not any more, after opting for SpotDraft, a Gurugram-based legal tech start-up, he says he’d “highly recommend” to others.
Founded this January by Madhav Bhagat, an ex- Googler, and Shashank Bijapur, a Harvard Law School alumnus, with the help of artificial intelligence (AI), it automates every aspect of what is known as contract lifecycle management. It recently raised a seed funding round of $550,000 (~3.57 crore), with Hunch Ventures as lead investor. The other backers are Spiral Ventures (Japan, previously known as IMJ Investment Partners), 500 Start-ups (USA), Singapore Angel Network and Satyen Kothari, founder and chief of Cube, and founder of Citrus Payments.
“Spotdraft is AI-driven and end-to-end contract life cycle management. which includes drafting a new contract and saving it, and all the contract signs earlier can also be uploaded in our platform,” says Bijapur. The three basics are contract creation or drafting one from a template, contract analysis (of the contents, to simplify it and understand the good, bad, etc) and contract management ( understanding and acting on the business aspects of a legal document).
Today, each of these three come with a high element of cost, time and error. Contract drafting is typically done by an expensive lawyer, with a draft template from the internet.
“We plug legal costs and give businesses a good solid template, through which they can draft and negotiate a contract all by themselves and in one place. In the event they have an existing contract template, our proprietary AI parses through it to point out missing important clauses, summarises the key terms, classifies the good, bad and ugly clauses to give a better understanding and negotiation power to the business,” the cofounder says.
The company’s AI creates a ‘smart inbox’ of all the contracts and notifies the user on important actions such as regulatory filings and coming deadlines. And, connects one’s contract to external data sources, to notify on breaches or changes in law.
The total addressable global legal technology market is estimated at $80 billion (excluding the self-help users who don’t have direct legal costs) and India is supposed to be a tenth of this. While the company doesn’t see any direct technology competitors here, it will be globally competing with Kira Systems, Congnitive+, Ravn Systems, Begal.ai and others.
“Our primary focus is on the Indian market. Moving forward, we want to focus on Southeast Asia. Our final goal is to move towards the North American and English-speaking European markets, in the next 18-24 months,” says Bijapur. In India, the company has about 4,500 customers, in less than nine months
SpotDraft has a freemium business model; charges are based on frequency of usage. For small businesses, it is ~799 per user per month, going up to ~1,499 per user per month for larger ones. It aims to break even in the next 14-18 months. “We plan to utilise the funds we have received for acquiring talent, scaling the team and technology. We would also like to use these for acquiring users,” says the co-founder.