Having helped raise in excess of $75 million in my career for a variety of high tech software startups I was not surprised to learn that Recommind, which offers an “eDiscovery” service aimed at law firms, has raised $7.5 million in a first round of venture funding. Although the funding was announced on October 8, 2008 and has probably been in the works for some time, there is always money available for a solid technology investment. Further and as indicated on this Blog over the past couple of weeks, the Financial Crisis of 2008 will actually provide a windfall for technology vendors in the eCompliance and eDiscovery markets.
The full text of the Recommind announcement as seen on the the Venture Beat site is as follows:
Recommind, which offers an “eDiscovery” service aimed at law firms, has raised $7.5 million in a first round of venture funding. Despite the slowing economy, chief executive Robert Tennant says his company should stay very busy in the coming months.
That’s because San Francisco-based Recommind provides a key tool for litigation. Its Axcelerate product is used during electronic discovery, also known as eDiscovery, which is the initial process of sorting through electronic records. With financial institutions collapsing, and legal battles likely to follow, the need for eDiscovery may be on the rise. Tennant says Recommind has been getting increased requests from its law firm customers, and he expects more to come, even as many companies cut back on their costs.
“Some technology companies’ capital decisions will get delayed … but when a judge says, ‘Thou shalt produce,’ you have to produce,” he says.
Of course, there are other startups entering the market — either involved directly in eDiscovery or in archiving documents for legal purposes — and they’re getting funding, too. For example, Mimosa Systems raised $17 million earlier this year. Other competitors include eDiscovery company Attenex and enterprise search company Autonomy. (Recommind also provides enterprise search.)
But Tennant says Recommind’s service is particularly advanced. He calls it “eDiscovery 2.0″ — a phrase Tennant sounds slightly embarrassed to use, but which gets the idea across. Recommind’s Axcelerate automates the initial process of sorting through documents and judging their relevance, thus making eDiscovery faster and more affordable.
Recommind has also been in the business for a while, with customers like well-known legal firms Cooley Godward Kronish and Wilson Sonsini Goodrich and Rosati. It’s already profitable, and has been growing at about 100 percent per year, Tennant says. So why does it need the funding? There’s a big opportunity for growth, he says. Recommind will use the money to expand its sales team and also acquire some new technology.
The round was let by Kennet Partners.
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