Kira Systems has raised $50m in its first round of venture capital fundraising, as the company's automated contract review becomes more popular among large law firms and corporate clients.

The fundraising comes from Insight Venture Partners, a New York-based private equity and venture capital investor in software businesses, and values the Toronto-based artificial intelligence company at a nine-figure number, said Kira CEO Noah Waisberg.

The $50m minority investment is the first time Kira, founded by Waisberg and Alexander Hudek in 2011, has received outside financing. The so-far "bootstrapped" company has grown to about 115 employees after having 35 employees at the start of 2017, Waisberg said.

The company's revenue has also grown about 100% annually, added Waisberg, declining to provide specific figures. Waisberg said the funding would help Kira grow as it seeks to tap into what its CEO called a "latent demand" for contract review services.

"There is a huge amount of legal work and contract review that is not done, and it is not done because it is economically impossible to get through the volume of documents that need to be reviewed," Waisberg said. "And our true opportunity is helping people tackle that latent demand of contracts that might be reviewed but aren't right now."

While a typical acquisition of a $200m company may now include reviewing about 100 contracts, Waisberg said that Kira's software, which can cut the time it takes to review contracts by up to 90%, could be used to greatly expand that number.

"If you think about a world where instead of reviewing 100 contracts, people are reviewing 5,000, you have to have a world where it's easier to get the contracts into the software and getting it out," said Waisberg, a former associate at Weil Gotshal & Manges. "So the company would put a lot of work into building [automated systems] that make that action happen."

In order to make automated contract review more widespread, Waisberg said Kira will focus its energy toward building a product that gives clients "answers" to their contract problems, rather than simply spotting certain aspects of a contract. Kira is also set to release more than 100 new provisions that its software can detect "out of the box", before a client has to train the software. Kira's software will be able to identify about 550 provisions, Waisberg said.

Kira's growth was accelerated in 2014, when Big Four accounting firm Deloitte signed on as a subscriber. Deloitte now has more than 5,000 professionals using Kira, which Waisberg said is the largest deployment of artificial intelligence software by any professional services firm.

Major legal clients including Clifford Chance, DLA Piper, Allen & Overy (A&O) and Freshfields Bruckhaus Deringer have been Kira subscribers since 2016, Waisberg said. Since the start of 2017, five of the top 10 firms ranked by the Vault legal directory have signed up to use Kira, he added. Today, the "majority" of the top 30 US law firms use Kira, Waisberg said.

Kira was also one of the second cohort of companies that moved into A&O's 'Fuse' tech innovation space in its London headquarters.

"I don't know that we could comfortably have grown much quicker than we have been, and we still had financial room to grow without this raise, but we think there is a lot of opportunity around contract review," Waisberg said. "Massive amounts of time are still spent reviewing contracts and people still aren't getting all the information they might out of them."

One reason why Waisberg said a world where 5,000 documents are reviewed for every deal may not materialise is what he described as the "hype" surrounding AI legal products. If people think AI can do more than it can, that disappointment may cause a lack of adoption among law firms and clients, Waisberg said.

"There are a lot of firms getting value out of [Kira] software as it is right now, and that's a good thing," Waisberg said. "I don't think we're too hype-y. People trust us and have found value with us. But the hype in the industry does hurt."

Peter Sobiloff, a managing director at Insight Venture Partners, will join the Kira board as part of the financing. Jonathan Rosenbaum, a senior associate at Insight, will also act as a board observer.

"Kira Systems' performance as a bootstrapped business has been impressive, and we're eager to partner with them to more aggressively pursue growth," Sobiloff said in a statement. "We don't see many pure-play AI businesses with their traction, and this success has come from the fact that Kira is fundamentally changing how contracts are reviewed. This represents an opportunity to make a meaningful impact across their core market segments."

In April, Tel Aviv-based LawGeex, an AI-based contract review platform, announced a $12m Series-B funding round led by Israeli venture capital firm Aleph. LawGeex has raised nearly $22m.