Ghent, Belgium-based Henchman, an AI-powered legal tech firm that aims to help legal professionals draft and negotiate complex contracts, announced on Thursday that it has raised €6.5M in a Series A round of funding.
The round was led by the U.S.-based Adjacent VC and German Acton Capital. Conviction VC and business angels Louis Jonckheere and Pieterjan Bouten (founders Showpad), Felix Van de Maele (founder Collibra), and Bram Couvreur (Partner at US-based law firm Cooley), also participated in the round.
The announcement comes a year after raising €2M funding to close its Seed round at €3M in February 2022.
Jorn Vanysacker, Gilles Mattelin, and Wouter Van Respaille founded Henchman in June 2021 with a single mission – to give the fastest contract drafting experience ever made.
Born out of legal professionals’ pain
In an exclusive interview with Silicon Canals, co-founder Jorn Vanysacker says, “The idea for building Henchman came from an incredible pain voiced by legal professionals who regularly draft complex, tailored contracts.”
Market research by Jorn Vanysacker and his team revealed that, “On a full drafting day, respondents agreed that they spend at least 60 minutes browsing through contract repositories and scrolling for previously written clauses or bothering colleagues for inspiration or advice.”
“When trying to consult a previously written contract, their workflow is interrupted and they tend to consult 5 to 12 previously written contracts to help with editing and reviewing,” he adds.
Henchman came to life during the earn-out period after his previous company, Intuo, was acquired in 2019 by Unit4.
“In the summer of 2020, we put the prototype in the hands of lawyers, which gave us a clear indication of a ‘problem-solution’ fit,” states Vanysacker.
Discussing the challenges faced in developing and launching Henchman, Vanysacker says, “From day one we had a very clear set of specifications we set out for the product and technology to embody before we wanted to ‘charge’ Henchman customers. For example, specs such as Henchman needs to be Plug & Play, dummy-proof, and system and language-agnostic. This process took us about 18 months.”
Solves a crucial problem for lawyers & legal professionals
Citing information from their market research, Vanysacker says that respondents indicated that a lot of redundant work is being done and that there is a “general fear of choosing the ‘wrong’ wording in a clause or definition.”
“No tool provides the right context and insights to support drafting decisions (e.g. is this clause according to company standard, is this variation the most used by my peers when working on a Share Purchase Agreement, what options do I have when US Law is applicable, etc.),” he says.
Here’s where Henchman comes in and addresses the issue.
The Belgian company automatically recognises and categorises the contracts and clauses, making it easier for the clients to search for those clauses.
“Some call it magic, others say our developers did an amazing job when building our unique technology that “understands” the content of contracts. In any case, this technology allows Henchman to accurately rank, suggest and compare clauses and definitions within the trusted Microsoft environment,” says Vanysacker.
The company’s technology is language and system agnostic, meaning it connects to any Document Management System and processes all clauses and definitions within hours.
“Henchman’s Ideal Customer Profile consists of lawyers who draft and haggle complex contracts. These complex type contracts are often found in legal teams such as M&A, Real estate, tax law, and also in-house legal departments,” says Vanysacker.
According to Vanysacker, Henchman’s solution is around 90 per cent accurate.
“The number will keep on going up,” he adds.
750% growth in revenue
Since its inception, Henchman experienced a growth of 750 per cent in revenue with more than 100 new customers in 15 different countries.
Currently, the company’s clients include German’s YPOG, UK’s Avery Law, and the Parisian BG2V. The Belgian firm employs 35 employees.
Henchman is designed to be GDPR compliant and uses the industry standard AES-256 encryption algorithm to encrypt data on the server that hosts it.
According to Vanysacker, Henchman undergoes regular penetration testing and security reviews to keep security in check.
Adjacent is an early-stage VC fund investing across Europe and the US.
“After a few reference calls it became clear that the power of Henchman is how perfectly the product fits into the legal professionals’ existing workflow. It is rare to see a SaaS company win international clients this early in its journey, but the teams’ customer obsession already drove adoption across Europe and in the US. I am excited to team up as we scale to the next level!” says Nico Wittenborn, Investor at Adjacent VC.
Acton Capital is a venture capital firm that has been investing in technology-based startups with proven business models from Europe and North America.
The Munich-based VC has already supported around 100 start-ups such as AlphaSights, Clio, Etsy, HomeToGo, Mambu, Momox, Mytheresa, and Zooplus on their way to international market leadership.