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Legal-tech startups have raised $4.3 billion in 2025, already 54% higher than 2024, and well past the $1.2 billion from 2023.

Driving the news: Two huge funding rounds joined the ranks last week.

Harvey, which is building AI tools for law firms, raised $150 million led by a16z at a $8 billion valuation, and Legora, a New York City-based collaborative AI platform for lawyers, raised a $150 million Series C led by Bessemer Venture Partners at a $1.8b valuation.

What they're saying: "I don't think we're even close to the top of the market," says Sameer Dholakia, partner at Bessemer Ventures Partners.

The intrigue: Investors have started to monitor the exits, and one looks much more likely than the other.

Zoom in: Those backing the industry seem confident M&A exits will be available as legal-tech startups grow, despite their existing within a specific niche.

Legal information giants Wolters Kluwer, Thomson Reuters and RELX, which owns LexisNexis, are likely to seek out partnerships with new legal AI startups, says Bessemer's Dholakia.

Some startups are also buying other startups to scale more quickly.

Case in point: Earlier this summer, Harvey inked a deal with LexisNexis, giving Harvey users the ability to get "trusted AI answers grounded in LexisNexis U.S. case law and statutes." 

By the numbers: M&A is on the way to top last year's total of 63 PE and strategic M&A, which would mark the third straight year of growth.

What we're watching: While the M&A activity is increasing, the numbers are still small and investors may start to question if this is too much too soon.

As for IPOs, eDiscovery vendor Disco (NYSE: LAW), the most prominent legal tech firm, went public in 2021 at nearly $2.4 billion. But its market cap has steadily dropped to about $420 million today, and there have been only four other IPOs since 2022.

The bottom line: The lack of IPOs means as VCs pile into legal tech, they'll keep a close eye on the M&A pipeline.

Legal-tech VC is booming

VC money in legal-tech has increased 54% already this year

Illustrated collage of a gavel, a hundred dollar bill, and various shapes.

Legal-tech startups have raised $4.3 billion in 2025, already <a class="gtmContentClick" data-vars-link-text="54% higher" data-vars-click-url="https://my.pitchbook.com/search-results/s595000379/overview_tab" data-vars-content-id="090a6b7a-2c25-4d38-86ff-67a274280905" data-vars-headline="Legal-tech VC is booming" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://my.pitchbook.com/search-results/s595000379/overview_tab" target="_blank">54% higher</a> than 2024, and well past the $1.2 billion from 2023.Driving the news: Two huge funding rounds joined the ranks last week.

Legal-tech VC is booming

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