Think back to the last time you drafted a business contract; say an employment contract for hiring a new team member, or a license agreement for onboarding a new customer that requires customization in your SLA. How was your experience? How many hours did you spend editing documents and sending different versions back and forth?
Enter: Precisely, a Gothenburg-based legal tech startup and our most recent investment at Peak.
Precisely offers a digital contracting platform that helps businesses manage the full contract workflow: from drafting and negotiating to signing and managing contracts. Having worked in law early on in my career, I am excited to (finally) help spur some innovation in this industry. In this piece, I dive deeper into why we invested in Precisely as our first investment in the Nordics.
Solving a well-known problem
As a venture capital fund, we are frequently in the midst of one legal process or another. Drafting transaction documents, negotiating specific clauses, etc. Legal work is an important part of our daily jobs. Investment documentation typically sees at least a couple of rounds of reviews before reaching a final version. This means sending Word documents back and forth and tracking versions. Who isn’t familiar with file names such as “Contract_v8_editsDZ_vFinal_RealFinal_edited.docx”?
This pain is by no means unique to investment funds like us. Our portfolio companies are growing at full speed, which means they are constantly drawing up employment contracts for new hires and license agreements for new clients. Managing and maintaining these contracts is a hassle and often neglected in mid-sized companies.
Out of your 80 employees, do you know which have an adjusted non-compete clause in their contract? And how do you keep track of which clients have customized terms and conditions?
In larger companies, dealing with the legal department is usually considered a bottleneck by business teams (think HR or sales). Legal counsels try to retain control over contract generation to ensure compliance. Meanwhile, business teams need flexibility and quick turnaround times to bring onboard new clients or new hires. Contract management usually happens through Word documents in Dropbox folders or, at best, uploading/downloading new contract versions into some database.
It’s time for a change.
In short, most of these processes have not changed a lot since I worked in law over 10 years ago. Precisely offers businesses a platform to improve efficiency throughout the contract lifecycle. Legal teams or business owners can set up contract templates and create a questionnaire to have the business user fill in the required inputs for the contract. After this, a contract is automatically generated. Once the contracts are signed, they are automatically stored in a database and available for search queries.
Looking for all employment contracts with a salary over $60,000, an expiration date in the next 6 months and without a non-compete clause? In legacy systems, this can take hours of work, while Precisely can do this in a few clicks.
Team: combination of legal and commercial experience
Building a platform for contract management isn’t for most people. Not only do you need a great deal of experience in drafting and managing contracts, but you actually also need to enjoy reading legalese.
For Precisely’s founder and CEO Nils-Erik Jansson, it’s his second nature. After founding his own law firm for startups and winning the Nordics “Legal Innovator of the Year” award in 2017, productizing his legal services into a scaleable legaltech solution was the logical next step.
However, it wasn’t just his legal background and experience that convinced us to invest in Nils-Erik. Beyond strong industry knowledge, he is also well-versed in online marketing techniques like SEO and SEA. Despite a small commercial team (until now, that is 😉), Precisely has won customers from all around the world through its marketing activities. While we usually see SaaS companies focusing on their home market first, Precisely’s early traction shows that there is global appetite for their solution.
Meeting the team in Gothenburg convinced us that we wanted to become a part of this team. The emphasis on building a strong team culture at this early stage especially impressed us. Perhaps a feature of Swedish (dare I say, Scandinavian) culture in general, but the team was so at home at the office that everyone took their shoes off when coming into the office (some people even had their designated pair of office slippers 😁).
After a decade of below-average innovation, it seems like the legal industry is finally warming up to innovation. Legaltech is a hot and growing industry and there are a ton of ambitious projects out there (although inevitably, not all are successful).
Within the digital contracting space, we’ve recently seen other new platforms popping up. Several of Precisely’s competitors recently raised large rounds of venture funding, so competition is heating up. However, contract automation is still a greenfield market; most potential clients are still operating on the biggest joint competitor of all new entrants: Microsoft Word.
Digital contracting platforms like Precisely’s can offer operational benefits to companies of nearly any size or shape, so we have no doubts about the size of this market. Moreover, Precisely has shown that they can win over customers from competing platforms with best-in-class features, like implementing complex legal logic into the contract templates, that outperform the competitors’ products.
With a strong product and raving customer references, the time has come for Precisely to focus on scaling up commercially. During the investment process, we’ve worked with Nils-Erik and the team to attract top talent to do so. Experienced sales and marketing leaders will join in the coming months to bring the commercial efforts to the next level and make Precisely a legaltech household name. We couldn’t be more excited to be a part of it!
Investing in the Nordics
Our investment in Precisely marks our first investment in the Nordics. Since the launch of Peak IV in July 2019, we invest across Europe, with a focus on the DACH, Benelux, and Nordic regions. After our first international venture capital investments in Germany and Belgium, Precisely embodies our bullishness on the Nordic entrepreneurial spirit. Stay tuned for more to come!
PS: We’ve made a first attempt at mapping out the Nordics ecosystem a while ago, would love feedback on this.