The AI legal tools sector continues to heat up, but the focus of competition is expanding from law firms to in-house legal teams within corporations. Sandstone has just completed a $30 million Series A round and is preparing to further expand its product to small and medium-sized enterprise legal departments.
Funding occurred just six months after the seed round.
Sandstone announced on Tuesday the completion of a $30 million Series A round led by Lightspeed Venture Partners. Existing investors including Sequoia, Mantis VC, SV Angel, Operator Partners, Kearny Jackson, Daybreak Ventures, and Litquidity Ventures also participated in the round.
This funding round comes just six months after its $10 million seed round, completed in January this year. The previous round was led by Sequoia, demonstrating continued investor commitment to this niche area.
Primary focus on internal legal workflows
Unlike legal AI tools such as Harvey and Legora, which are more focused on law firm practice scenarios, Sandstone targets the numerous fragmented tasks handled daily by in-house legal teams.
Jarryd Strydom, Co-founder and Chief Operating Officer, said legal teams receive tasks daily through multiple channels such as Slack, email, and Jira. Sandstone aims to use AI to route and prioritize these tasks, enabling teams to build customized workflows on the platform to complete tasks like drafting, reviewing, and legal analysis.
According to the company’s vision, the initial target users will be the legal departments of small and medium-sized enterprises. The product’s focus is not on legal reasoning itself, but on relationship management and process automation, with greater emphasis on specific collaboration needs within corporate legal workflows.
The legal AI competition continues to细分
The legal tech sector where Sandstone operates has recently seen active funding and has become one of the most competitive verticals for AI startups. Lightspeed values the “highly specialized AI” approach—enhancing the practical usability of AI tools through deep understanding of specific workflows.
However, competition in this market is intensifying. In addition to startups, leading model providers are also accelerating their entry into legal scenarios. The report notes that Anthropic is continuously expanding its Claude for Legal product, having added tools such as case retrieval and deposition preparation in May.
This means that the AI competition in legal scenarios is shifting from a battle of general capabilities to a competition over specific roles, processes, and types of clients.