Sandstone raises $30M to bring AI to in-house legal teams

With Harvey and Legora reaching eight-figure funding rounds, legal tools have proven to be one of the fastest-growing and most contentious industries among AI startups. But while these tools focus on private practice, some startups believe there is still a large part of the legal market underserved.

Sandstonewhich announced $30 million in Series A funding on Tuesday, is focused on an overlooked part of the legal space, highlighting the tangle of overlapping tasks and systems that in-house legal teams face.

The Series A was led by Lightspeed Venture Partners, with participation from existing investors at Sequoia, Mantis VC, SV Angel, Operator Partners, Kearny Jackson, Daybreak Ventures, Litquidity Ventures and others. The Series A comes just six months after a $10 million seed round in January that was led by Sequoia.

As the founders describe it, Sandstone’s initial user base will consist of the legal departments of small and medium-sized companies.

“They open their laptop in the morning and see all the work coming in through different intake channels, whether that’s Slack messages, emails or Jira,” co-founder and chief operating officer Jarryd Strydom told TechCrunch. “AI helps them route and review that work appropriately, and then they can build custom workflows on top of our platform to actually do the work, whether that’s drafting, reviewing or providing legal analysis.”

The result has little in common with legal reasoning systems such as Harvey and Legora. Instead, Sandstone focuses on relationship management and workflow automation, both tailored to the unique demands of in-house legal work. According to Strydom, the focus on internal legal departments allows Sandstone to provide value where more general AI implementations often fail.

“One of Lightspeed’s beliefs was that they really believe in highly specialized vertical AI,” says Strydom, “because it takes a detailed understanding of workflows to really identify how AI can help.”

Sandstone will also face stiff competition from groundbreaking AI labs, which are increasingly turning their attention to the legal space. Anthropic has been steadily expanding its Claude for Legal offering, adding new tools for case law searching and preparing depositions in May.