Responding To Strong Market Interest In Its Gen AI Product, Josef Closes ‘Lightning-Fast’ Funding Round

Legal automation company Josef has closed what it is describing as a lightning-fast funding round in order to capitalize on market response to Josef Q, the AI-powered product it brought out of beta in November 2023 that enables legal and compliance teams to easily create self-service Q&A tools.

Participants in the round were Josef’s existing three investors: OIF Ventures, Carthona Capital and The LegalTech Fund. The announcement was made in Miami at the TLTF Summit, the conference produced by The LegalTech Fund.

The amount of this funding round was not disclosed. The Australia-based company had previously raised $3.5 million in 2022, $2.5 million in 2022, and $1 million in 2019.

Since expanding into the North American market in 2022, Josef has added customers from  corporate legal and compliance teams including L’Oréal and Bumble, the global insurance company Bupa, leading law firms such as Orrick and Gunderson Dettmer, and law schools such as NYU and Cornell.

“When you’re on to a good thing in this market, you have to move fast,” said Josef cofounder and CEO Tom Dreyfus. “The response to Josef Q has been overwhelming, particularly from legal and compliance teams in Fortune 500 companies. This funding top-up will allow us to capitalize on those opportunities and to continue to lead the market in reliable and accurate legal AI.”

Zach Posner, cofounder and managing director of The LegalTech Fund, told me that Josef Q has rapidly gained traction among corporate customers. He praised the company for having rapidly layered generative AI onto the no-code platform it had started out with, creating a product that the corporate market has show great interest in.

“It’s a simple, low-stakes way for them to be using generative AI to solve big pain points,” he said. Those pain points involve the many different policies that apply within a corporation but that many employees do not understand. “So when you can ask exactly what you need to know and get the right answer quickly, it makes sense and people start using it.”

The company first announced the beta launch of Josef Q in March 2023 and released it to general availability in November 2023.

Developed in partnership with OpenAI, Josef Q uses AI to transform policies and regulations — such as those pertaining to privacy, data security, HR and procurement — into digital Q&A tools, so that employees or clients can easily get answers to policy and compliance questions.

Josef says it will use the funding to continue building out AI controls and guardrails, including human-in-the-loop moderation and escalation pathways that have been designed specifically for legal and compliance.

It will also continue to embed Josef into the broader legal technology ecosystem, enhancing its integrations with the Microsoft Suite, Google Workspace, Salesforce, Slack and more.

“The founders’ ability to identify the right ways to deploy GenAI for legal and compliance teams continues to set them apart,” said Jerry Stesel, partner at OIF Ventures. “Josef Q offers controllable, trustworthy and hyper-accurate legal AI built to scale.”

For legal and compliance teams, the company says, Josef Q enables them to develop accurate and controlled AI tools that the business can use to answer complex and high-value questions.

One example is insurance company Bupa, which has used Josef Q to create business-facing tools for its legal marketing playbook and across its suite of HR policies.

“Josef Q offers the guardrails we need to build tools that can handle high value, confidential information,” said Claire Nuske, head of legal operations at Bupa. “We’re transforming the way we work, and driving real efficiencies in our business, and Josef gives us the confidence we need to deliver self-service experiences at scale.”

As I previously reported, during the private proof-of-concept phase of Josef Q’s development that preceded its commercial release, participants built and deployed tools across legal, compliance, privacy and data, HR, legal operations, tax and more. The use cases included tools that:

• Provided automated guidance on landlord-tenant laws in Ithaca and New York City.
• Helped customer-facing teams in a financial services company identify and deal with vulnerable customers in accordance with regulatory requirements.
• Answered questions on new tax laws and regulations, including the Inflation Reduction Act.

Sam Flynn, Josef’s cofounder and COO, says that legal and compliance teams are realizing that deploying AI in high-risk contexts is harder than it looks. As they come to that realization, “they’re turning to us to show them how you can deploy this powerful technology safely and effectively.”