Sandstone raises $30M Series A to bring AI-powered workflow automation to in-house legal teams

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

With Harvey and Legora burning through eight-figure funding rounds, legal tools have proven to be one of the fastest-growing and most hotly contested verticals among AI startups. But while those tools focus on private practice, some startups believe there's still plenty of the legal market that isn't being served. Sandstone, which announced $30 million in Series A funding on Tuesday, is focused on an overlooked slice of the legal space, focusing on the tangle of overlapping tasks and systems facing in-house legal teams. The Series A was led by Lightspeed Venture Partners, with participation from existing investors at Sequoia, Mantis VC, SV Angel, Operator Partners, Kearny Jackson, Daybreak Ventures, Litquidity Ventures, and others. The Series A comes just six months after a $10 million seed round in January, which was led by Sequoia. As the founders describe it, Sandstone's initial user base will be the legal departments at small and mid-sized businesses. "They open up their laptop in the morning, they see all the work that's come in through different intake channels, whether that's Slack messages, emails, Jira," co-founder and chief operating officer Jarryd Strydom told TechCrunch. "AI helps them route and triage that work appropriately, and then they can build custom workflows on top of our platform to actually execute work, whether that's drafting, reviewing, or providing legal analysis." The result has little in common with legal reasoning systems like Harvey and Legora. Instead, Sandstone focuses on relationship management and workflow automation, both tuned to the unique demands of in-house legal work. As Strydom sees it, the focus on in-house legal departments allows Sandstone to provide value where more generalized AI deployments often flounder. "One of the convictions of Lightspeed was that they really believe in highly specialized vertical AI," Strydom says, "because it takes a granular understanding of workflows to really nail down how AI can help." Sandstone will also face heated competition from frontier AI labs, which are increasingly turning their attention to the legal space. Anthropic has been steadily expanding its Claude for Legal offering, adding new tools in May for case law searches and deposition prep.

Sandstone Raises $30 Million to Expand Legal Tech Offering | PYMNTS.com

The startup's Series A round, announced Tuesday (June 9) was led by Lightspeed Venture Partners and will be used to expand Sandstone's enterprise offering and hire people with expertise in both the technological and legal worlds. "Our customers run some of the most complex legal organizations in the world. We're investing in the people and infrastructure to onboard them fast and support them obsessively," the company said in its announcement. "We're recruiting across every function for people who understand the profession and the technology -- because that combination is the whole point." Sandstone said it aims to solve a blindspot for legal teams. While a generic AI tool might be able answer the same questions as a senior lawyer in a way that looks right, it doesn't understand the firm's business, making it "confident and context-blind." "This is why 'SaaS is dead, just use an agent' gets legal exactly backwards," the company said. "The hard part was never generating the words and replacing them in Word. The hard part is binding them to context -- and doing it right." Meanwhile, nearly all legal work defaults to costly frontier models or outside firms, even though reviewing something like an non-disclosure agreement doesn't require the "horsepower" of hammering out an acquisition. "Not every task needs the senior law firm or Opus model. Most legal tools can't tell the difference. We can, because we know what the task actually is," Sandstone said. Sandstone is part of a growing number of companies bringing AI into the legal world. In March, Harvey raised $200 million for its legal infrastructure for law firms and in-house teams, in a round that valued the company at $11 billion. Harvey said its AI-powered products are designed to streamline workflows in contract analysis, due diligence, compliance and litigation. More recently, Anthropic released several new Claude tools for the legal industry amid increasing demand from attorneys. "Earlier this year we released our first legal plugin, and in the months since, legal professionals have become the most engaged Claude Cowork users of any knowledge-work function," Anthropic said in the post. "We're now building on that with a much larger set of tools." As covered here in October, AI has been making inroads into the legal industry, with the technology becoming embedded at law firms' in-house operations. "As investors took notice, funding to legal technology startups surpassed $2.4 billion in the first nine months of 2025," PYMNTS wrote in May. "The surge in funding reflected confidence that automation can relieve the legal sector's document-heavy workloads and unlock new operating leverage for firms."