Europe is an active market for legal tech, with the European B2B legal tech market expected to generate revenues of close to $6 billion by 2025 according to data from Statista.
The region is home to the General Data Protection Regulation (GDPR), considered one of the toughest data privacy laws in the world, which European Union-based companies and U.S.-based organizations that handle EU personal data are required to comply with.
But these compliance requirements tied to GDPR often involve hiring external legal counsel to draft the necessary documentation, generating legal costs which are usually expensive across Europe, especially for many small and medium-sized businesses (SMBs).
According to Martin Folke Vasehus, CEO of Danish firm ComplyCloud, some of the GDPR rules include companies having to implement multiple privacy policies and procedures while conducting risk assessment and auditing themselves on an ongoing basis.
“For example, if you use Microsoft which we all do, then you have to conduct a risk assessment on your Microsoft applications if you transfer personal data to the U.S. If you do, there are some requirements you must meet that have to be documented,” Vasehus told PYMNTS in an interview, likening it to a time-consuming bookkeeping process.
That’s where he said he saw a business opportunity to “democratize the process” as only a few large companies had the money to fulfill the multifaceted legal requirements around the GDPR and manage its administration.
“The unique value proposition that you get from us is the feeling that you have a lawyer specialized within the GDPR 24/7 at a fixed price,” he explained, adding that having a built-in lawyer as a software as a service is what sets ComplyCloud apart from other players offering Governance, Risk & Compliance (GRC) Software-as-a-Service.
“We haven’t just built the information framework where you have to type in [your information] and take legal responsibility yourself. [We’ve] built a software as a service that will actually function as a real trusted legal advisor within GDPR compliance,” he noted.
The company’s legal software is built out of algorithms that help to determine the documentation a client is obliged to submit to authorities. And so far, the company is making good headway, generating 100% growth rates annually since it launched in 2017, with a churn rate of less than 1%.
Today, the Copenhagen-based firm has clients in over 26 countries, including from the U.S., U.K. and Singapore, and is looking to expand further in the coming months.
The UK as a Launchpad to the US
The Danish developer recently secured a 4.5-million-euro investment ($5.08 million) from local technology investor SEED Capital, a raise that shows burgeoning investor interest in the LegalTech sector, Vasehus said.
The company has earmarked the funds to improve its software technology as well as grow the workforce from the 100 full-time employees it currently has.
But hiring more employees for the niche market is by far the biggest challenge the company faces today, and one that ComplyCloud will continue to work on this year.
According to Vasehus, the company’s product development team is partly made of lawyers who can code and build algorithms themselves, limiting the pool of potential employees or “legal developers,” as he calls them, who have both the legal expertise and the analytical and technical know-how to support the business.
Related news: Denmark’s ComplyCloud Snags 4.5M Euros To Expand Digital Software Lawyer
The new investment will also be used to grow the business beyond Denmark this year, with a key focus on the United Kingdom (U.K.) where they are currently rolling out operations with the hiring of their first U.K. salesperson and meetings lined up with potential clients.
One of the main reasons they are targeting the country is because of its high adoption rate of LegalTech there, he said, in addition to the fact that the U.K. has “the most expensive lawyers in the whole world,” making it a strong business case for ComplyCloud.
Vasehus also has future plans to expand globally, another area where the U.K. will play a key role. “It’s [the U.K.] a big market so if you make it there, then it’s a stepping stone towards the U.S., which is an even bigger market.”