May 15, 2021

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Legal software provider Clio reaches unicorn status with $110-million funding round

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Clio hopes to launch an acquisition strategy and boost hiring

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Vancouver-based legal software company Clio has become Canada’s latest tech “unicorn” after raising US$110 million in financing it hopes to use to launch an acquisition strategy and boost hiring.

The deal gives Themis Solutions Inc. — which operates as Clio — a valuation of more than US$1 billion, a milestone for tech startups known as “unicorn” status, and comes just a year and a half after it announced what was then the largest venture-capital investment for a Canadian company.

Clio, which offers software that helps lawyers manage their practices, attracted the interest of funding giants T. Rowe Price Associates and Toronto-based OMERS Growth Equity, two “crossover” investors known to back both private and public companies. The deal is valued at $138 million.

While Clio’s chief executive said the firm does not intend to go public in the near-term, he has aspirations of doing so one day.


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“We really like that T. Rowe Price and OMERS are crossover investors, so in the case where we have a potential future IPO, they’ll be great supporters of the company through and after an IPO,” Clio co-founder and chief executive Jack Newton said in a phone interview. “Ultimately what I’m trying to do with Clio is create a company that will outlast me and outlast the rest of the current team.”

Clio was launched in 2008 by Newton and Rian Gauvreau, a childhood friend and former information technology manager at a law firm in their hometown of Edmonton. The company provides cloud-based software to more than 150,000 lawyers, allowing them to manage billing, time tracking and case management. It’s customers are primarily small and medium-sized firms in Canada, United States and other global markets.

We’ve seen 10 years of digital transformation in legal happen in 10 months

Clio co-founder and chief executive Jack Newton

In 2019, Clio raised the largest venture-capital investment for a Canadian company at the time with a $333.5 million Series D funding round. The transaction has since been surpassed by only two other venture financings: St. John’s-based fraud-detection and anti-money-laundering software provider Verafin Inc.’s $515-million raise in late 2019 and the $385 million taken in by Vancouver-based blockchain technology company Dapper Labs Inc. in March, according to data from Refinitiv.

Clio is at a pivotal point in its growth after seeing a boom in customer acquisition during the COVID-19 pandemic as companies moved employees from offices and corporate towers to working from home. Once digital-reluctant lawyers dependent on pen and paper suddenly found themselves in need of cloud-based programs to do their work, prompting a “mass evacuation to the cloud.”


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“We’ve seen 10 years of digital transformation in legal happen in 10 months,” Newton said.

“Virtually overnight, using cloud-based technology went from being a nice-to-have that relatively few forward facing and innovative law-firms were embracing, to something that any law firm that wanted to survive the pandemic needed to adopt.”

To fuel its growth, Newton plans to start acquiring smaller firms that could bring new products and services to Clio. In its 13-year history, the company has only made one acquisition, buying U.S.-based client relationship management software provider Lexicata in 2018.

Newton said the company is looking to expand its services to allow customers to operate their practices entirely on the cloud, including features to help prospective clients find lawyers and connect with firms online, as well as secure video conferencing program and a payments platform.


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With 575 employees, Clio is also growing its team to meet the bump in demand. Newton anticipates that the firm will hire 250 people to increase the team by 40 per cent this year.

And through its newest investors, Newton hopes to benefit from the insights of other fast-growing companies under the T. Rowe Price Associates and OMERS umbrellas, including U.S.-based home service businesses software provider ServiceTitan, restaurant management platform Toast and Canadian darling Shopify Inc.

In January, T. Rowe Price Associates backed British Columbia-based medical device company Kardium Inc. and OMERS has invested in some of Canada’s biggest tech companies, including Wattpad Corp., Hootsuite Inc. and Wave Financial Inc.

The funds were not available for comment.

Financial Post

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Stefanie Marotta

2021-04-27 12:06:57

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