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Contract lifecycle management tools offer VCs great potential. Two years ago, contract-drafting, management, and review software startups raised over $70 million in venture equity. Contract lifecycle management, or CLM, is growing fast compared to customer relationship management ($44.9 billion in 2023). Legal tech spending—including CLM—will triple by 2025, according to Gartner.
SpotDraft is one of many CLM vendors competing in a growing market. For the 2017 startup that Shashank Bijapur, Madhav Bhagat, and Rohith Salim founded, Premji Invest, Prosus Ventures, 021 Capital, Arkam Ventures, Riverwalk Fund, and 100x Entrepreneur Fund led a $26 million Series A funding round.
SpotDraft plans to spend $30.5 million on product development and “aggressive growth” in North America. This will allow the company to double its staff of 170 people in 18 months.
“The capital we raised allows us to capture the market opportunity as it evolves over the next several years,” CEO Bijapur told in an email. “We believe we’re stepping into a new era of legal technology, and SpotDraft is going to lead the next generation of legal innovation that saves time and money.”
While working at White & Case in NYC, Bijapur came up with SpotDraft. He saw legal teams struggle with high contract volumes and wanted to automate repetitive workflows.
Bijapur co-founded NYC-based SpotDraft with friends Rohith Salim and Madhav Bhagat, both Carnegie Mellon computer engineers.
“We are building an AI engine personalized for legal teams to ensure that a lot of the repetitive work related to contract review and negotiation happens faster than ever,” Bijapur said. The organization moves faster by closing contracts faster. SpotDraft provides deep insights into the contracting workflow to help teams identify bottlenecks and move faster.
SpotDraft works with Salesforce and HubSpot and uses AI to pull out and organize details and clauses from contracts.Self-serve contract templates let legal, sales, and HR teams quickly create and send contracts.
SpotDraft’s AI can sum up tracked changes to contracts, search across contracts, and make follow-up tasks for contract execution.Bijapur says that SpotDraft’s AI has handled more than 1 million contracts, which it uses to improve its algorithms in a secret way.
SpotDraft’s automated approvals system lets users make custom workflows to automate approvals based on jurisdiction, deal value, and entity.Teams can stay organized with a centralized task center that shows deadlines, reminders to renew, and tasks for both individuals and the whole team.
“Data and technical decision makers love the ability to get insights into contract data just as easily as they are used to getting insights into CRM and ERP data using our open APIs,” Bijapur said. “We also let you embed contract execution into any app as part of the onboarding flow. This gets rid of the only manual step in an otherwise automated process for onboarding vendors and customers.”
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Bijapur claims revenue tripled this year, so business is good. SpotDraft’s competitive pricing won Airbnb, Notion, Panasonic, Strava, and Chargebee. Bijapur said SpotDraft has “hundreds of customers” and “tens of thousands” daily active users.
“Not all companies need a full-fledged CLM. These companies still struggle with contracts, collaboration, and transparency between legal and other departments. “This year, we want to add value to this market segment,” Bijapur said. Despite macroeconomic headwinds, we grew well as a business during the pandemic. We are very well capitalized and optimistic about our growth opportunities in the coming years.”
