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.

Why this matters: The investment in Sandstone highlights the growing importance of AI in the legal sector, particularly for in-house teams at small and mid-sized businesses. As AI startups like Harvey and Legora focus on private practice, Sandstone's specialized approach to workflow automation and relationship management could provide a competitive edge. For businesses, this means more tailored solutions to streamline their legal operations, potentially leading to increased efficiency and cost savings.