Follett: Creating a new category of legal tech software
A start-up that creates visual models of complex legal transactions is aiming to double in size by the end of next year after raising almost £3m in funding.
Tim Follett, founder and chief executive of StructureFlow, said the company intended to raise a further £7m to £10m next year to add to £6.5m it had already raised, enabling it to grow staff numbers from 30 to around 60.
Mr Follett, a former City solicitor, said StructureFlow had 40 paying law firm customers across the world, including the magic circle firms Slaughter and May, Linklaters and Allen & Overy, along with Baker McKenzie, Norton Rose Fulbright and others.
There were three customers in Australia, eight in the USA and Canada, and one in Africa, along with 23 in the UK and Europe. Five are in-house teams, acting on recommendations from law firms.
StructureFlow graduated from Allen & Overy’s incubator, Fuse, at the end of last year, having previously been in Slaughter and May’s incubator, Collaborate.
Mr Follett qualified at and worked for Slaughter and May before moving to Farrer & Co and setting up StructureFlow in 2017.
He explained many commercial deals had an “element of complexity”, not just within the biggest transactions, like Elon Musk’s acquisition of Twitter, for which he had created a visual model, available on the company’s website.
He said there were “quite a number of moving pieces” in StructureFlow’s latest funding deal, for which he had created another visual model.
Mr Follett said UK venture capital firm Venrex, which provided £1.5m of the capital alongside existing and angel investors, found the model so useful they asked him for an account.
“You can’t work out what’s going on unless you can visualise it. You need software which can design and manage the deal, and record what happens.
“We believe we are creating a new category of legal tech software – transactional modelling.”
Mr Follett said the aim of raising more money through a Series A funding round next year was to create a “runway to grow revenue”, providing capital to scale the product through sales and marketing while continuing with product development.
In the “ecosystem of corporate transactional activity”, law firms made up only one part, and private equity funds and insurers were “particularly interested” in visual models.
He said the current economic uncertainty was “challenging for everyone”, but products with “a really strong vision and a product delivering real value” would always be able to raise capital.
Mr Follett said the biggest opportunity to drive growth was in North America, because of the size of the market and complexity of the deals handled by its law firms. “The industry there is waking up to PowerPoint not being the future.”
An advantage of the legal sector was its resilience in economic downturns and visual modelling could facilitate transactions in good and bad times.
Mr Follett said there was also “a significant opportunity” for StructureFlow in the public sector space.
Although he was not targeting them for sales, the Financial Conduct Authority , Prudential Regulation Authority or HMRC could all benefit from visual modelling.
“We can provide significant value to these organisations because they’re trying to understand and regulate corporate transactions. Quite often they will need to use diagrams to understand what is happening.”
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