Sandstone raises $30 million to bring AI to in-house legal teams

With Harvey and Ligura going into eight-figure funding rounds, legal tools have proven to be one of the fastest-growing and most controversial sectors among AI startups. But while these tools are focused on private practice, some startups believe there is still much of the legal market that is not being served.

Sandstone, which announced $30 million in Series A funding on Tuesday, is focusing on a neglected segment of the legal space, focusing on the tangle of tasks and overlapping systems facing in-house legal teams.

The Series A was led by Lightspeed Venture Partners, with participation from existing investors Mantis VC, SV Angel, Operator Partners, Kearny Jackson, Daybreak Ventures, Liquidity Ventures, and others. The Series A comes just six months after a $10 million seed funding round in January, which was led by Sequoia.

As described by the founders, Sandstone’s initial user base will be legal departments at small and medium-sized companies.

“They open their laptop in the morning, and they see all the work that’s coming through the different intake channels, whether that’s Slack messages or emails or Jira,” Jared Strydom, co-founder and chief operating officer, told TechCrunch. “AI helps them route and triage work appropriately, and then they can create custom workflows on top of our platform to actually execute the work, whether that’s drafting, reviewing or providing legal analysis.”

The result has little in common with legal reasoning systems such as Harvey and Ligura. Instead, Sandstone focuses on relationship management and workflow automation, both of which are compatible with the unique requirements of in-house legal work. As Strydom sees it, focusing on in-house legal departments allows Sandstone to provide value where more general AI deployments often falter.

“One of Lightspeed’s convictions was that they really believe in highly specialized vertical AI, because it takes a precise understanding of the workflow to identify how AI can help,” Strydom said.

Sandstone will also face stiff competition from frontier AI labs, which are increasingly turning their attention to the legal field. Anthropic has been steadily expanding its Claude for Legal offerings, adding new tools in May for case law research and deposition preparation.