Legaltech firm DISCO raises $60m
A leading legal technology company has raised $60m in an equity finance deal with top investment partners.
Investors in DISCO include Georgian Partners, Investors Bessemer, Venture Partners, LIveOak, Breyer Capital and The Stephens Group.
The award-winning, Texas-based company, which applies AI and cloud computing to assist lawyers and legal teams to improve case outcomes, has a current valuation of $785m.
Experts believe the DISCO valuation demonstrates investor confidence in legaltech as a category of enterprise cloud computing. The company is now a valued partner for the biggest legal departments, law firms, and government agencies globally.
The latest round of funding also takes the total investment in DISCO to $195m. This solidifies the company’s leading position in the enterprise legal technology sector. DISCO’s products and services cover the investigation and litigation lifecycle, making it the market-leader in the cloud and e-discovery market.
Conquering the cloud
The switch to cloud computing is now a critical strategy for corporate legal departments and law firms. The COVID-19 pandemic has sped up the need for organisations to ditch their legacy systems and embrace those that accelerate the digital transformation. Legaltech solutions enable team members to work remotely. Legal professionals also recognise DISCO’s role in improving legal outcomes for clients by enabling them to focus on the practice of law.
Kiwi Camara, DISCO’s founder and CEO, said: “We are building the enterprise software system of record for the legal function. Every major company has a legal department and spends money on legal services, but there is very little software built to help legal professionals do their work.”
He continued: “We want to change that. Legal is a critical business function just like sales or marketing or finance. We believe that software can transform the legal function just as it has transformed every other business function. DISCO is positioned to build for legal the kind of horizontal platform that Salesforce built for sales.”
Camara explained that DISCO will use this investment to aggressively expand its go-to-market team, doubling sales capacity in North America over the next 12-15 months. Expanding the company’s enterprising sales team and well as growing the presence in the EMEA and APAC regions are also on the table.
DISCO will expand its strategic channel programme, joining forces with service providers that resell DISCO. The company will also concentrate on building its cloud technology platform and software products, including DISCO Case Builder, DISCO Managed Review and DISCO E-discovery.
Tyson Baber, Lead Investor at Georgian, commented: “In an emerging space like legal technology, real-world solutions require both world-class technology and first-rate professional services. DISCO delivers both. The investment in engineering and development of their proprietary platform, coupled with their incredible team, makes them well-positioned to help legal teams embrace the future.”
FCA bans ‘price walking’ for insurers from Jan 2022
Insurers will no longer be allowed to raise premiums upon annual customer renewals following a new ruling by the Financial Conduct Authority (FCA)
The new move, which comes into effect in January 2022, will directly affect people renewing their home or motor insurance because they will pay no more for their premiums than a new customer.
The FCA said the change will save loyal customers an estimated £4.2bn over a 10-year-period. However, it also admitted the move could mean cheaper deals for new customers can no longer be sustainable for insurers attempting to attract business.
Price walking practices ended
According to reports, the FCA has been working on changing the rules on ‘price walking’ as it is termed, because customers are charged more their annual premiums, even though their level of risk remains the same. The system has resulted in complaints from consumer groups that loyal customers pay more unnecessarily.
"These measures will put an end to the very high prices paid by many loyal customers. Consumers can still benefit from shopping around or negotiating with their current provider, but won't be charged more at renewal just for being an existing customer."
Victory for the customer
Consumer groups have hailed the change as a victory for customers who have ended up paying higher premiums unnecessarily, but admitted it presented huge implications for insurers in the short term.
Consumer Intelligence CEO, Ian Hughes said, “These changes represent a tsunami for both insurers and their customers, but we should be in no doubt that the fault line that sits underneath this is fair value, mentioned 153 times in the final statement. GIPP changes will feel like just a ripple for those who don’t offer fair value to customers."
He continued, “This is going to be a bumpy ride for insurance brands and consumers alike in the short term. Today, the FCA has revealed that cash and cash-equivalent incentives, other than toys and carbon off setting, cannot be used to entice new customers without being offered to renewing customers. This means the savviest consumers who shop around each year will see prices rise and discounts and offers disappear.
“However, there is an opportunity for the industry to take advantage of all this change that is coming and do something that will be good for brands, good for the industry and good for consumers."
Consumer Intelligence PR and communications manager, Catherine Carey agreed, and described the victory as “a shot in the arm for innovation.”
Carey said the move “presses a giant reset button on the relationship between price and value, it will change the relationship between brands and consumers.”
She explained, “We expect to see insurers changing their models and new firms entering the market for the first time as loss-making year one pricing phases out. If you look at these new rules, and specifically the introduction of fair value, it’s the most exciting time for the development of the general insurance market for decades.”
Hughes also warned against insurers resisting the regulatory change, “Those that don’t take advantage of the opportunity are going to find it really tough.”
He added, “The tipping point we find ourselves at today is a critical point in the journey of this industry and there is an opportunity to be positive.”