Noetica AI, a promising startup spearheaded by former Wachtell, Lipton, Rosen & Katz associate Daniel Wertman, recently announced a $6 million seed investment round. Lightspeed Venture Partners led the round, taking the New York-based startup’s total funding to $7.8 million, following a pre-seed round last year by Bling Capital.
The primary product of Noetica AI is a software platform that employs artificial intelligence to assist lawyers in accessing and compiling complex financial documents for corporate debt transactions. While Wertman acknowledges the technology isn’t a panacea, it can serve as a powerful tool for legal professionals, much like how Microsoft Excel revolutionised the world of investment banking.
Wertman’s previous encounter with AI technology came while working at Wachtell, an elite Big Law firm that was an early adopter of machine learning in electronic discovery. His departure from the firm, where he worked on major transactions including counselling Allergan Inc. on its $63 billion sale to AbbVie Inc., was met with contentions due to the unrivalled reputation of the firm.
The platform developed by the startup seeks to fill a significant hole in the current landscape of legal technology. According to Wertman, prior to Noetica AI, there was no market database that could be utilized to check if a borrower of a certain type could achieve specific terms, a problem which he hopes Noetica AI will help solve.
The leaders of Noetica AI, including Wertman, believe that artificial intelligence represents a paradigm shift for the legal industry, much like what the advent of the internet was in the 1990s, the proliferation of the iPhone during the early 2000s and the rise of social media during the last decade.
However, selling a new technology to lawyers is not an easy task, as acknowledged not only by Wertman, but also Justin Overdorff, a Lightspeed partner who joined the venture capital firm two years ago from Stripe Inc. A generational shift within Big Law is moving many less tech-savvy baby boomers out of leadership roles, heralding a new era where legal professionals demonstrate more interest in leveraging novel legal products.
Noetica’s growth in the client roster has benefitted notably from word of mouth referrals, according to Overdorff. Lightspeed’s investment will aid Noetica in expanding its operations and applications in its product suite. Uniquely, Noetica AI doesn’t license third-party software from providers like OpenAI, setting them apart from other AI startups in the legal space. Wilson Sonsini Goodrich & Rosati, who advised Noetica on its fundraising, currently serves as outside counsel to the startup.