AI Legal Tech Funding Surges in 2025 with Major Investments from Legora and Eudia

2025 has marked a watershed moment in the realm of legal technology, with venture capital (VC) funding skyrocketing to an impressive $3.2 billion. This surge captures the essence of a sector that is not just experiencing a fleeting moment of popularity but is instead undergoing a fundamental transformation. However, as this influx of investment raises eyebrows, concerns about whether a bubble exists loom large, prompting many to examine the tangible revenue outcomes behind the excitement. Within this vibrant backdrop, law firms are harnessing the power of artificial intelligence (AI) to enhance their service delivery, striving to provide faster and more effective solutions to clients.

For many practitioners, the landscape of legal practice shifted dramatically in 2025. The advent of AI became not just a luxury or an innovative add-on but a fundamental requirement—an evolution that was long awaited. Law firm leaders and corporate general counsels expedited the tech transition from initial pilots to full-scale production. This evolution saw standardized research and drafting copilots coming into play, with firms establishing robust innovation teams and focusing on training junior lawyers to adeptly navigate this new landscape.

The increasing demand for AI-driven solutions fostered a fertile environment for emerging startups focusing on areas such as contract review, corporate due diligence, and predictive analytics. Prominent players like Harvey and Legora have captured significant attention and investment, signaling a shift in how legal services can be delivered. Even well-established firms like LexisNexis and Clio have had to adapt, making aggressive moves to stay competitive amidst the burgeoning landscape.

The total funding for legal entities ballooned to $3.2 billion this year, according to a Business Insider analysis based on Crunchbase data. Such valuations have inevitably led to speculation about a bubble, particularly given the eye-popping figures associated with some of the newer names in the industry. Yet, there remains a strong belief in the reality of revenue growth that underpins this financial enthusiasm—as evidenced by ongoing buyer demand.

This year, Business Insider delved deep into the activity surrounding legal tech funding, uncovering a series of notable deals that reflect the sector’s vibrancy.

Legora raised $80 million — without even trying

Surprisingly, the CEO of Legora, Max Junestrand, revealed that the company wasn’t aggressively pursuing funding last spring. However, a flood of offers ensued, signaling confidence in their model. With over 400 clients spanning 40 markets, including high-profile law firms like Cleary Gottlieb and Goodwin, Legora’s influence is palpable. In a follow-up round in October, the company secured an additional $150 million in Series C funding, led by Bessemer Venture Partners.

Eudia’s $75 million shopping spree

Emerging from stealth mode, Eudia underlines the strategic use of its funding. Securing $105 million in Series A funding from General Catalyst, Eudia’s structure encompassed a conditional clause allowing for immediate access to $30 million and the promise of another $75 million contingent upon it identifying suitable acquisition targets. Their initial acquisition of Irish legal services provider Johnson Hana sets a precedent for future growth.

Bench IQ raised a round to predict judges’ rulings

Bench IQ, co-founded by Jimoh Ovbiagele, has designed a proprietary dataset enhanced with large language models to provide insights into how judges tend to rule. The startup recently completed a successful $5 million seed round led by Battery Ventures and Inovia Capital, adding another layer of data-driven decision-making to legal strategies.

An ex-Microsoft scientist takes on work visas

Casium, the brainchild of AI expert Priyanka Kulkarni, raised $5 million in seed funding. The company is on a mission to revolutionize how employers handle work visas, moving away from cumbersome Excel spreadsheets and outside counsel towards a streamlined portal. This tech-tailored solution emerges at a time of flux in immigration policies, embodying the adaptability necessary for modern legal needs.

The software-first approach to legal advice

Another innovative endeavor stems from Covenant, co-founded by former WeWork lawyer Jen Berrent, which raised $4 million to establish an AI-native law firm. The firm specializes in reviewing private market fund documents, utilizing advanced algorithms to sift through extensive legal texts, highlight significant issues, and suggest enhancements tailored to specific investor criteria.

A lawyer-backed startup for due diligence

Marveri has emerged with an ambitious agenda: to drastically reduce the time involved in due diligence processes from months to mere minutes. Their software automates the review and organization of corporate documents, leveraging sophisticated algorithms. Having bulked up its financial backing with $3.5 million, the venture boasts the guidance of notable litigator Alex Spiro, enhancing its market credibility.

Attorney’s crystal ball into settlement rulings

Theo Ai has pioneered a “predictive engine” designed to eliminate uncertainties tied to pricing lawsuits. With over $10 million in backing, the company’s offering equips law firms and corporations alike with insights garnered from historical data, enabling firms to forecast settlement ranges and probabilities for incoming cases, offering a significant strategic advantage.