Prime Highlights:
- The legal tech sector raised $6 billion across 292 companies in 2025, showing strong growth despite fewer investors.
- Startups like Harvey, Legora, and Clio made headlines with massive funding rounds and high valuations.
Key Facts:
- Total exits in 2025 reached $2.29 billion, with vLex achieving the top exit at $1 billion.
- Revenue growth was rapid for many companies, with Libra rising from $2M to $3M in weeks and GC AI from $1M to $10M in a year.
Background:
The legal tech sector grew in 2025, raising nearly $6 billion from 292 companies. Although there were fewer investors and companies than in 2024, the industry still showed strong growth, especially in tools for law firms and compliance.
Some startups made headlines with large funding rounds. Harvey raised four funding rounds totaling $818 million and reached a valuation of $8 billion in October. On the same day, Legora announced a $1.8 billion valuation with a $150 million Series C. Clio raised $850 million in two rounds, after its $900 million round in 2024. Other companies raising big amounts included Filevine ($260 million), Peregrine ($190 million), and EvenUp ($150 million).
Revenue growth in legal tech has been strong. Libra’s revenue rose from $2 million to $3 million in a few weeks, while GC AI grew from $1 million to $10 million in a year. Harvey reached $100 million in annual recurring revenue in only three years, much faster than Clio and Litera, which took 17 and 30 years to reach over $300 million.
The market for company sales stayed active but smaller than before. Total exits were $2.29 billion, down 39% from 2024. The largest exit was vLex at $1 billion, while Libra had an impressive 90x return on investment. Other notable acquisitions included Manus AI, reportedly bought by Meta for $2 billion, showing a strong interest in legal software solutions.
The compliance and GRC sector also kept attracting investment. Companies like Awesome Compliance, Vanta, OneTrust, Verisk, TrustArc, and Palantir operated in a market that raised $27 billion in 2025.
While valuations and revenue growth are impressive, questions remain about the long-term sustainability of such rapid growth. The industry is now looking closely at long-term value and market dynamics, particularly as law firm budgets continue to drive vendor revenues.
