legaltech marché france nouveau

Legaltechs 2021, the appearance of a real market in France

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After years in its infancy in France for Legaltechs, 2021 still offers some good surprises. Thus, it seems that Legaltech companies are taking an increasingly important place in the French economic landscape. Of course, compared to the amounts raised in other tech sectors, or even across the Atlantic, France is still playing with small pennies. Nevertheless, the sector is strengthening and passing a milestone this year with a range of indicators in the green. For example, the value of fundraising is up 11% compared to 2019. They then total 57.8 million euros over the year. Moreover, this funding is not devoted to the biggest since 56% of startups say they access it without difficulty. A favorable context that should allow French Legaltechs to make their way internationally.

In 2021, it’s time for profitable Legaltechs!

While the trend is positive, the Legaltech sector remains marginal in France. Thus, investments in legaltechs currently do not exceed 0.7% of total investments in 2021 all startups combined. Similarly, the highest financing obtained by a legaltech weighs only 5.1% of the largest fundraising of the year in France. Recall that in 2020, the record for financing went to LegalVisionPro. The Bordeaux legaltech had then raised 3 million euros.

Nevertheless, more and more Legaltechs are seeing their turnover explode. Proof that it is sometimes enough to use moderate financing, than to count on a series of rounds of multi-million rounds without being able to meet its business model… For good reason, in 2021, legaltech companies with a turnover of between 10 and 30 million euros increased by 183%. Taking a wider range, ranging from 5 to 30 million, they have even doubled. Moreover, a quarter of these companies show growth of more than 100% over the year.

Far from belonging to only a handful of elected officials, the success of French legaltechs seems to find a foundation in a large part of these actors.

Legaltech fundraising
Fundraising supports international development.

French Legaltechs that attract foreign attention

Where for a long time, French LegalTechs were confined to the French market, 11.2% of them now have an office in another country. A quarter of them are even exported outside Europe since 15% have customers in Africa, 10.5% in North America. On the other hand, the US market remains one of the most complicated ecosystems to penetrate. Especially since it has its own start-ups and innovations, benefiting from much more ambitious fundraising. Moreover, it is the New York investment fund Lead Edge Capital that is at the origin of the highest fundraising of the year for legaltechs.

In addition to the ability of a start-up to arouse the interest of investors, other indicators are raised in favor of innovative French companies. Thus, national legaltechs are apparently able to attract international profiles. According to the 2021 barometer, not far from a third of them have recruited a foreign talent.

Another satisfaction of the year, the eyes are not only on the legaltechs based in Île-de-France. While nearly 70% of the ecosystem is located there, poles are developing in the region: Lyon, Bordeaux, Toulouse, Normandy, Creuse… The FrenchTech Bordeaux also lists about fifteen start-ups in the legaltech sector (2).

Thus, these companies are now fully integrated into the local economic network. They are working with large groups to find growth drivers; or become good recruiters. In this regard, 2021 shows a clear increase in companies with more than 50 employees (+113%). And the trend is not downward since 86% of companies plan to recruit again in 2022.

Sources

  1. 5th edition of the French Legaltech Barometer, Wolters Kluwer / Maddyness / Banque des Territoires, 6 December 2021
  2. LegalTech Archives, French Tech Bordeaux
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