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Austin legal tech firm Disco aiming for $200 million stock offering

Austin American-Statesman logo Austin American-Statesman 7/13/2021 Kara Carlson, Austin American-Statesman
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Austin-based legal technology company Disco is going public, with plans to raise as much as $203 million. 

The company, which makes an artificial intelligence powered platform to assist legal teams, set pricing terms for its initial public offering offering of stock in an amended filing with the U.S. Securities and Exchange Commission. 

The company has declined to comment about the planned IPO.

Disco originally filed its plans to go public in a registration statement June 25, under the legal name CS Disco Inc., with plans to list on the New York Stock Exchange under the ticker "LAW." Disco has yet to set a date to begin trading.

The company said it expects to sell 7 million shares of its common stock for $26 to $29 per share, which means it could raise between $182 and $203 million.  Disco said it expects to have about 56.4 million shares outstanding after the IPO.

Disco was founded in Houston by CEO Kiwi Camara in 2013 and opened an engineering hub in Austin the following year. The company moved its headquarters to Austin in 2018. 

Disco's platform and services are designed to be used by the legal industry and government agencies. It has a number of products including its flagship, electronic discovery software, which helps lawyers gather evidence without use of third-party technology or services. It also has software designed to help with case management, compliance, legal document review, disputes, investigations and data collection.

More: Austin legal tech firm Disco lands another $40 million for growth

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In the company's securities filing, Camara said he believes technology will improve legal outcomes and lawyers' ability to help their clients by automating parts of their practice that don't require human legal judgment, freeing up lawyers to focus on other priorities.  

"Our mission at Disco is to use technology to strengthen the rule of law. Technology will transform the law just as it has transformed every other area of life," Camara said. "This transformation creates a massive opportunity to build an iconic business: the category definer for the new category of legaltech." 

The securities filings also gave a look into the company's finances. In 2019, Disco had revenue of $48.6 million and reported a net loss of  $29.8 million. In 2020, its revenue grew to $68.4 million, with a net loss of $22.9 million. In the first few months of 2021 the company had revenue of $21.1 million, with a net loss of $11.2 million, compared to $15.7 million with a net loss of $2.9 million in the same period the year before.

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Disco had 336 full-time employees as of late March and over 900 customers, including law firms, legal service providers and government organizations, according to the securities filings.

"Since our founding in 2013, and beginning with our founders, Disco has assembled a team that combines strength in software engineering, cloud computing and AI, with deep legal expertise and a rich understanding of the problems that lawyers and legal professionals face and how they work." the company said in the filing. "This combination of expertise means that our team is distinctly well-positioned to execute on our vision of building technology that powers the legal function across companies in every industry."

Disco has raised $161 million since it was founded, including a $60 million funding round last year.

Investors also currently hold significant stake in the company, securities filings show. Bessemer Venture Partners owns 26.4%, Austin-based LiveOak Ventures own 19.2% and Geogrian Partners owns 12% of the company. 

Disco joins a number of Austin companies that have gone public in recent years, including Bumble, which raised $2.5 billion when it went public in February, the biggest IPO in Austin history. 

Fitness franchise F45 Training, which recently moved its headquarters to Austin, filed to go public June 21, and is also expected to begin trading in the near future. 

This article originally appeared on Austin American-Statesman: Austin legal tech firm Disco aiming for $200 million stock offering

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