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Luminance, a legal tech startup, secures $40 million in fundraising thanks to the growing interest in AI technology.

Founded in September 2015, Luminance develops machine learning models that help lawyers automate contract reviews and shorten the time it takes to get them signed. The company was founded by a combination of lawyers, mathematicians, and experts in mergers and acquisitions at the University of Cambridge.

Luminance is one firm of the many generating buzz from investors thanks to the hype swirling around artificial intelligence. Companies like OpenAI, Anthropic, Cohere, and Mistral have raised billions of dollars from venture capitalists — along with interest from large tech firms like Microsoft and Amazon.

Investors have been placing bets on sector-specific AI companies lately, sometimes in favor of businesses pursuing a form of “general” AI that would be capable of performing any task imaginable.

Legal business

Legal technology firm Luminance has raised $40 million in fresh funding from investors to grow its U.S. footprint, capitalizing on the wave of investor interest surrounding artificial intelligence. The company told CNBC that it raised the fresh capital in a Series B funding round led by U.S. venture fund March Capital.

Luminance is backed by Invoke Capital, the venture capital arm owned by controversial British entrepreneur Mike Lynch. Lynch has been accused of artificially inflating the value of his software company Autonomy to Hewlett Packard Enterprise and is currently facing legal challenges related to this matter.

Last year, the company launched an artificial intelligence tool capable of negotiating a contract completely autonomously without any human involvement. Luminance says the instrument, dubbed Autopilot, handles day-to-day contracts negotiations, and especially the tedious manual work of reviewing nondisclosure agreements (NDAs).

Luminance declined to comment on its valuation, but Lightbody said that it fetched a “significant premium” over the $100 million assessment that the company secured in 2018, when it last raised external funds.

She noted that domain-specific large language models are “absolutely key” in the legal field. Generative AI tools like ChatGPT have become known for producing “hallucinations” — answers that contain false information about certain historical events, in an effort to guess the answer to a user’s question.

Luminance plans to invest aggressively toward expanding its U.S. footprint, in an effort that Lightbody said will include hiring new executives locally, as well as exploring new offices.

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