It felt like everyone in the legal technology space went public in 2021. LegalZoom and Disco are very different companies, but both burst onto the market this past summer, signaling a new phase for a legal technology sector that is quietly gaining strength while the Street is still distracted by other gleaming professional services objects.
Exterro is the kind of company that seemed ready to follow this step into the market. The Legal Governance, Risk and Compliance offerings are at the intersection of e-discovery, digital forensics, data privacy and cybersecurity that everyone needs. In addition, sales have quadrupled in the past four years and Exterro has already thrown in the Jordan Lawrence Group and AccessData to create a pretty attractive IPO.
But in the end, Exterro looked at the state of the industry and resisted the siren song for the time being. Seems like a pretty good decision.
As the market struggles, Exterro has just completed a “strategic recapitalization and secured additional committed equity as part of a continuation of the vehicle transaction.” That’s a lot of words to say that Exterro is worth over a billion dollars and eager investors are counting on the company’s continued growth.
Therefore, Exterro enjoys better timing than a rom-com protagonist. Shielded from the vagaries of the market and the bureaucracy of public ownership, Exterro now has resources and flexibility in a buyer’s market.
Bobby Balachandran, Exterro’s founder and CEO, summed it up by saying that the soft market “is like everything is priced right…I wouldn’t say we’re in super bad times, but there’s a reality check in the market.” .” And with many exciting and fast-growing products that are still not making money, that puts Exterro in an enviable position as a profitable, big money company in a market with important strategic resources.
[Since 2018] Exterro has more than quadrupled its sales and now serves more than 3,000 customers around the world. Exterro’s joint growth strategy focused on organic product innovation, geographic expansion and strategic mergers and acquisitions, including the acquisition and integration of Jordan Lawrence and AccessData. It also included significant R&D investments in e-discovery, privacy, digital forensics and incident management, as well as investments in the Exterro team.
As Balachandran did it analogously, legal tech is having its iPhone moment. “The iPhone used to be everything. Once everything is in one package, there are no more loose items. Nobody carries a separate camera anymore. This convergence is happening in the legal world.” Because the lines between legal and business are blurring when it comes to data management and there is a demand to bring the traditional ‘legal tech’ use cases together with everything else. In light of this convergence, Exterro is taking advantage of the moment to grow both organically and inorganically. Or, put more bluntly, “innovate like crazy, accelerate product growth and integrate new technology into our platform.”
The day will come when Exterro goes public, probably right now in 2023. But for now, it just continues to improve its profile.
And why not in an environment like this?
Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to send an e-mail for tips, questions or comments. follow him Twitter if you’re interested in law, politics and a healthy dose of college sports news. Joe is also a Managing Director at RPN Executive Search.