Crosby, a recently launched legal tech startup, has made quite the entry with a huge $5.8 million in seed funding. Sequoia Capital supported this thrilling new round of investment. Meet this industry-changing company that is on a mission to transform the legal services market. Together, powered by artificial intelligence, they provide smarter, quicker and more effective legal answers. Ryan Daniels, a lifelong attorney and the son of law professors, was one of the original co-founders of Crosby. Together with co-founder John Sarihan, another former early Ramp employee, they are ready to redefine the delivery of legal services.
Crosby soft-launched in January and has quickly passed the 1,000 customer contracts reviewed threshold. The firm employs around 19 people, including its founders and a team of lawyers trained to utilize its proprietary AI software. It’s telling that on Crosby’s client roster—filled with some of the fastest-growing startups you haven’t heard of yet—are Cursor, Clay, and UnifyGTM.
The company raised its seed round, led by Sequoia’s Josephine Chen and Alfred Lin. It raised notable angel investments from some big names including the co-founders of Ramp, Opendoor, Instacart and Flatiron Health. Josephine Chen expressed confidence in the founding team, stating that “for us, it’s probably 70% around the team and 30% around the market, market dynamics, and the insight that the founders have there.”
Ryan Daniels is a superstar in this arena and brings deep experience to bear. He has served nearly a decade as general counsel for several other startups. Daniels noted the challenges he faced in his previous role, saying, “My last company, where I was the only legal person, grew from about 10 to 100 people, and I found that most of the time that I was spending on legal was for our contracts, sales agreements, and MSAs.” This commentary serves to elaborate on his intention for starting Crosby.
Crosby is not only a purveyor of AI software for the legal profession. Instead, it is building AI into its own law firm operations in order to deliver legal services faster. The young venture’s goal is to cut multi-party contract negotiation periods from weeks or even months down to just a few minutes. As John Sarihan emphasized, “The innovation here is in the tech and in the people.”
Crosby’s business model rides the waves of the vast $300 billion U.S. legal services market. The company’s goal is to solve the biggest bottleneck in most startups – contract negotiations. Chen highlighted this issue, noting that they had seen similar challenges in their own portfolio companies: “We had seen, even in our own portfolio companies, how negotiating contracts can be a bottleneck for growth.”
Josephine Chen is the one who first identified Ryan Daniels’ founder potential while at Sequoia. Their working relationship has deepened over the years. She was connected to John Sarihan largely thanks to her startup ecosystem connections. Our pre-existing rapport made it much easier for Sequoia to develop conviction to lead Crosby’s round.
Crosby’s mission is all about being smart with our efficiency. It moreover ignites a disruptive change in the provision of legal services. As Daniels stated, the goal is to “build our own law firm in order to own the entire process, end to end.” This vision has placed Crosby at the forefront of innovation in legal technology.
