Spin-out and start-up

After raising $11 million in Series A funding in March, their company, Arteria AI, reached a deal with Acadia, the global financial risk management firm specializing in derivatives. A few weeks ago, the company hired former Sobeys General Counsel Karin McCaskill as a Marketplace Advisor.

Austin, Huq and Wong began in the “Wild West of Legal Tech” more than ten years ago. Their first business, ATD Legal Services, focused on using technology for document review. Deloitte bought the company in 2014 and hired the co-founders to work in-house. “It was an exciting time,” says Austin, CEO of Arteria AI. “Tech is about solving real problems rather than finding a nail to hammer. When we were at Deloitte, we learned to look at all different problems - not just through a legal lens.”

As Austin was running Deloitte’s AI team in Toronto, she and her business partners created Arteria AI as a tool to help lawyers draft contracts. Their roots are founded in fintech, focusing on helping lawyers close financial deals by making contracting easier. Arteria AI’s system extracts data from contracts so organizations can use analytics to help make informed decisions.

“Fundamentally in the last ten years, we’ve been focused around data,” says Huq, co-founder and Chief Revenue Officer at Arteria AI. “We were helping lawyers harness the data.”

Huq and Wong convinced Austin to take “another swing” at running their own business. They decided to spin-off Arteria AI from Deloitte in October 2020 to get more access to venture capital. “We loved it at Deloitte and our mentors there,” says Austin. “But we wanted to unlock the further growth potential of Arteria and put it out into the world as its own technology solution.”

The strategy worked. In March, Arteria AI, received $11 million in Series A seed funding round, led by Information Venture Partners and Illuminate Financial Management. The funding will be used to scale the company and grow its expanding global customer base.

The goal is to take a “data first” approach. The Arteria AI will offer suggestions on what clauses to use and what clauses to negotiate when drafting contracts. The goal is to create a seamless contract drafting and execution model where each edit is captured, analyzed and approved in real-time.

“Anything you do with a bank starts with a contract,” says Huq. “You start with companies outsourcing this work to other countries like India where information from contracts was manually entered in. Then you have AI systems like Kira Systems [recently acquired by Litera] that use AI. We take a step further and conceptualize contract negotiations as data. We have functionality that lawyers and engineers can use. We turn everything into structured data. We enable customers to take the data and make use of it.”

The new deal with Acadia means Arteria AI will have a large data source from the financial services sector. Acadia’s investors include Citigroup, HSBC, London Stock Exchange Group and JP Morgan.

“Acadia is a company we admired for a long time,” says Huq. “Their investors are some of the largest banks in the world. We prioritized Acadia because they are established in the fintech market. We want to know how to do something greater and better for clients.”

While most of their clients are in the financial services sector, they don’t want to be pigeonholed as simply a fintech or legal tech company.

“We see ourselves as a tech company,” says Austin. “We are an enterprise SaaS company. Legal is one of the users of our technology. We want to help enable lawyers to work in the way they like to without restriction.  They can do exactly what they want. Other companies are focused on trying to change what lawyers do. We want to work within the spectrum of how lawyers want to work.”

With new funding and new clients, Arteria AI’s employee base has jumped from 15 in October 2020 to more than 60 today. Earlier this year, the company made significant hires. In February, John Wallace, former leader of AI Professional Services at Deloitte, joined Arteria AI as Head of Professional Services, and Bret Taylor, former Senior Manager at Salesforce, joined as Head of Sales. Within the last two months, the company opened offices in the U.S. and the U.K.

“We can’t wait to get back in person, especially since we’re always onboarding people,” says Austin. “It’s great that people have faith in this company. We’re humbled to have them work with us.”

After some much needed rest for the rest of the summer, the next steps for Austin and the team involve acquiring other startups to bolster their technology and expand their client base.

“Our tech is in excellent shape,” says Austin. “We have wonderful clients but of course need to acquire more!  We have product-market fit and are now able to provide true value to each customer. We’re trying to bring this Canadian startup across the globe.”