TermScout Raises $5M Co-Led By NFX to Scale Platform That Turns Contracts into Data

TermScout, an AI-based contract data and review company, announced today that it secured an over-subscribed $5M in seed funding co-led by NFX and Ground Up Ventures, with participation from The Legal Tech Fund, Killer Whale Strategies, Underdog Labs, Bridge Investments, and others. The company plans to use the funding to grow its team, expand its contract database, and support the launch of Benchmark, a new comparison product allowing customers to compare more than 1,000 commonly signed contracts. Termscout is also adding network effects veteran and NFX General Partner, James Currier to its board of directors.

The Problem: Contracting is Broken

Contracts are the backbone of today’s economy and govern almost every commercial relationship between businesses and people. Unfortunately, their length and complexity make it nearly impossible for people and businesses to properly review and understand the contracts they sign. In fact, a World Commerce and Contracting study found that businesses spend an average of $6,900 reviewing even simple contracts.

“Ensuring your business has a robust contract review system in place is mission-critical for every company,” explained James Currier, General Partner at NFX. “With state-of-the-art machine learning and insights from thousands of best-in-class contracts, TermScout is creating network effects that will help users convert contracts from obstacles into assets.”

TermScout’s Solution: AI-Powered Contract Review and Comparison

TermScout’s AI-powered contract review tool tells users exactly what a contract says, how it compares to market, and whether or not it meets the user’s defined criteria. Its platform uses artificial intelligence to scan the contract text and turn it into structured data that users can organize, analyze, and compare. All of TermScout’s data is QC’d by human reviewers to produce the highest quality data on the market, and TermScout customers safely share anonymized and aggregated data with one another through a data collective framework.

Today the company also announced Benchmark, a first-of-its-kind tool that allows its users to compare their IT contract to hundreds of anonymized and aggregated negotiated contracts and more than 1,000 unredacted public contracts used by companies like Google, Microsoft, Salesforce, and others. This first of its kind offering helps customers ensure their contracts strike a balance between the terms they want and the terms their counterparties expect.

“We continue to invest in data, analytics and technology to make our contracting processes more efficient and effective. By combining innovative technology with a pragmatic approach to contract analysis and negotiation, TermScout brings together analytical tools, market data and a strong understanding of the needs of in-house legal teams to improve and simplify the contract review process.” Dina Ganz Traugot, Group General Counsel at Travelers

“The volume of contracts we enter into grows exponentially every year, but the laws governing them and the technology facilitating them haven’t changed much in centuries,” said Otto Hanson, CEO and co-founder of TermScout. “For contracts to work for the billions of global transactions each year, we need a way to analyze all of them to answer two key questions: do they meet our acceptance criteria and how do they compare to market? When that data becomes universally accessible, contracts will happen with zero friction, with both parties fully informed about what they’re agreeing to.”

About TermScout:

Founded in 2018 after winning the Global Legal Hackathon, TermScout’s mission is to make the contracts of the world simple, understandable, and useful. It is the world’s first contract rating and comparison company, serving in-house legal departments and procurement groups at companies like NetApp, Freshworks, Techstars, Automox, and many more. Headquartered in Denver, Colorado, with employees across the U.S., the company leverages advanced machine learning techniques to constantly train on the world’s largest human-reviewed dataset. The company’s AI-powered contract review platform enables users to quickly understand what a contract means and how it stacks up against other companies within an industry.

Learn more and try TermScout for free at termscout.com

Contact Information

Otto Hanson

CEO / Co-Founder

TermScout

(1) 520-850-9814

Otto@TermScout.com