Harvey and Legora have topped an eight-figure funding round, proving that legal tools are one of the fastest-growing and most competitive areas for AI startups. But while these tools are focused on individual practices, some startups believe there is still a large unserved legal market.
Sandstone, which announced $30 million in Series A funding on Tuesday, focuses on the tangle of overlapping tasks and systems faced by in-house legal teams, highlighting some of the legal areas that have been overlooked.
The Series A was led by Lightspeed Venture Partners with participation from existing investors including Sequoia, Mantis VC, SV Angel, Operator Partners, Kearny Jackson, Daybreak Ventures, and Litquidity Ventures. The Series A round comes just six months after a $10 million seed round in January led by Sequoia.
According to the founders, Sandstone’s initial user base will be the legal departments of small and medium-sized businesses.
“When I open my laptop in the morning, I see all the work coming in through various ingestion channels, including Slack messages, emails, and Jira,” co-founder and chief operating officer Jarryd Strydom told TechCrunch. “AI helps us better route and prioritize work. We can then build custom workflows on our platform to actually do the work, such as drafting, reviewing, and providing legal analysis.”
The results have little in common with legal reasoning systems like Harvey and Legora. Instead, Sandstone focuses on relationship management and workflow automation, both tailored to the unique demands of in-house legal operations. As Strydom sees it, the focus on in-house legal departments allows Sandstone to deliver value in places where more generalized AI deployments tend to struggle.
“One of the beliefs at Lightspeed is that we really believe in highly specialized vertical AI,” Strydom said. “To really figure out how AI can help you, you need to understand the workflow in detail.”
Sandstone will also face strong competition from cutting-edge AI labs that are increasingly interested in the legal field. Anthropic has been steadily expanding its Claude for Legal services, adding new tools for case searches and deposition preparation in May.
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