Tech: This CEO explains why his legal tech startup took $25 million in funding even when it didn't need it

Logikcull took in a $25 million round earlier this year, even though it didn't need it, says CEO Andy Wilson. Logikcull is an eDiscovery startup that's helping lawyers do more with fewer resources.

• Legal tech startup Logikcull provides eDiscovery software, helping lawyers sift through massive piles of documents. It competes with the likes of Symantec and Microsoft.
• Logikcull raised $25 million in January, even though it didn't need it, says Wilson. The CEO tells us it's because Logikcull has surged in popularity in the legal world.
• Its best-known customer might be the legal team representing the gymnasts suing Michigan State University for its role in the Larry Nassar case.

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Logikcull, a San Francisco-based startup that makes eDiscovery software, didn't need the money when Silicon Valley venture firm New Enterprise Associates approached the company last year. Yet, the firm gave Logikcull $25 million, preempting its next funding round, the company announced in January.

Logikcull didn't need the cash because, a year earlier, business had "exploded," CEO Andy Wilson told Business Insider. The company's headcount has expanded from 35 to over 100. And customer count has increased 500% in under a year.

"To be honest, we really weren't ready for it," Wilson said. "We were averaging a few customers a month before, now we get 70 to 80 per month."

Logikcull lets users drag and drop large amounts of data — such as emails, slack messages, texts, and office documents — into a database that can easily searched. For lawyers, this is especially important during the process of Discovery, the part of a lawsuit where each party requests evidence and information from the other side before trial.

There's already eDiscovery software on a the market that lets lawyers sort and organize documents online. The market is set to hit $18.49 billion by 2021, according to Zion Research, and the industry has some big players such as Dell, Symantec, IBM, and LexisNexis.

But eDiscovery can be expensive, sometimes costing five or six figures for a yearly subscription or license. Logikcull, by comparison, is one of a few eDiscovery startups that have adopted a "pay-as-you-go" model. Instead of a yearly subscription, users now pay $40 for every gigabyte of data uploaded. Wilson attributes Logikcull's recent success to the pricing model.

Leveling the playing field

Logikcull is particularly popular with people representing themselves in court, and at smaller law firms that don't have the budget to spend on old-school eDiscovery software, Wilson says — although he notes that big name firms and large companies are customers too.

Recently, the legal team representing the gymnasts suing Michigan State University for its role in the Larry Nassar case, used Logikcull to sort through a massive hoard of documents from the university. In a less public example, we spoke to a lawyer in rural Flordia who says she used Logikcull in a case where she uncovered a massive health insurance scam.

"It was a breath of fresh air. I was able to do all of the work it was taking them days and weeks to do, I was able to do it in hours" Michelle Jordan, the lawyer in Florida, told Business Insider.

In this way, Wilson said, Logikcull is leveling the playing field so smaller firms can fight "data dumps," a legal strategy that involves burying the other side with so many documents, their legal team is forced to spend all of their time sorting through them, instead of planning a strategy.

"Do you think it's in the best interest of a larger adversary to make your life easier, especially the smaller guys? For a long time, that was a great strategy because the little guy didn't have s--t," Wilson said.

The tool has even spread beyond the legal profession, says Wilson. Business teams use Logikcull when doing due diligence on a company its thinking of acquiring or investing in. Wilson has seen Logikcull used for internal investigations and audits. Governments — from the city of Baltimore to small towns — use Logikcull to process Freedom of Information Act requests from journalists, a usage that is becoming increasing popular, Wilson said.

"Pre-Logikcull, it was taking them an average of three weeks to comply with every [Freedom of Information Act] request, they would have to print things out and manually redact them. Now, they do all of that stuff same day," Wilson said.

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