Just three months after graduating from Sequoia’s first European accelerator programme, Arc, legal startup Fides has just raised $4.3m from a very shiny list of angel investors. The company’s founders say they want to help companies fulfil their corporate governance duties without a million spreadsheets.
What does Fides do?
- Fides is a web-based app designed for general counsels to digitise and manage their governance duties all in one place — so tasks like singing for a resolution of shares are all managed on one dashboard. “What we discovered is that everything, especially around entity management and board management, is totally standardisable — it's really based on laws and contracts that don’t change every day,” CEO and cofounder Lisa Gradow tells Sifted. “But because it’s so dull for the lawyers, there’s a big capacity for human error. So we thought there should be a tool for it.”
- It’s started off testing its product with SMEs and startups, and has already received particular interest from the compliance issue-plagued fintech sector — including unicorns N26 and Revolut.
What’s next for Fides?
- In three months' time, Fides plans to roll out to large enterprises with 50+ subsidiaries — which will be its core market going forward. It operates on a monthly fee-based business model, varying depending on how many entities a company has.
- Part of the fresh capital will go towards the AI tool the company is developing in order to automate as many of these tasks as possible.
- Fides currently has a team of 16 — predominantly made up of engineers and lawyers — and plans to grow to around 40 in the next 12 months.
Who’s investing in Fides?
- Berlin-based early stage VC fund La Famiglia led the round
- Cristina Stenbeck (owner of Kinnevik and board member at Zalando and Spotify)
- Gesa Miczaika and Bettine Schmitz from the Auxxo Female Catalyst Fund
- Christa Davies (CFO of AON, board member at Stripe and Workday)
- Katharina Jünger (founder of TeleClinic)
What’s the market like?
So far, the US has dominated the governance software market, which means most products on the market are heavily geared towards the US legal system. The biggie is New York HQ’d Diligent, founded in 2001, which now has more than 1m users from across 25k global companies. And Canadian HQ’d Athennian also provides similar corporate governance software.
A few regtechs have emerged on the scene targeting other mundane legal tasks like contracts signing but so far, corporate governance has remained untouched by European startups. This means it’s a big market — as Revolut and N26’s interest in Fides would suggest. So far, all startups have been able to do to tackle increasing corporate governance duties is hire more people to their legal and governance teams. We all know how much lawyers cost, but they’re the last thing to go in budget costs because they’re so indispensable. So the opportunity to save big bucks by automating these tasks may be arriving at just the right time.