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One of the few remaining privately funded companies in the e-discovery space is welcoming in its first institutional investor. On May 23, Portland, Ore.-based Exterro announced a strategic investment from New York City-based private equity firm Leeds Equity Partners, in what Exterro CEO and president Bobby Balachandran told Legaltech News was a “nine figure deal.”

Exterro is known primarily for Orchestrated E-discovery platform, which includes software for e-discovery, information governance and project management. Originally focusing on corporate legal departments, the company has been recently increasing its presence in the law firm space.

Leeds Equity Partners, meanwhile, is a familiar name in what it calls the “knowledge” sector, focusing on the information services, education and training, and software industries. To e-discovery practitioners, Leeds is perhaps best known as the investor behind legal education company BARBRI, and its subsidiary ACEDS (the Association of Certified E-Discovery Specialists).

Exterro did not state the exact dollar figure for the deal, but Balachandran said that Exterro's recent growth—as much as 50 percent in current revenue year-over-year—made now the time for a substantial outside investment. He explained that Exterro had received a lot of interest from outside parties concerning an investment, but Leeds' expertise in the area and Balachandran's previous familiarity with Leeds managing partner Jacques Galante made them the best fit.

“We felt that the market demand for our SaaS [software-as-a-service] software was high and significantly growing, so we wanted to find a partner who… can partner with the management team, and let us operate independently but also at the same time have that outside gunpowder for growth,” Balachandran said.

Growth is indeed in Exterro's plans—similar to other e-discovery companies that have received outside funding, Balachandran mentioned M&A activity and inorganic growth as drivers for the deal.

“I think organically we're doing incredibly well, and we're going to accelerate that further,” he explained. “But we see a lot of really good opportunities in the market to provide even more value to our customers sooner than if we built it on our own.”

Recently, Exterro's development team has focused heavily on integrating artificial intelligence into its technology, with yesterday's launch of the Exterro Smart Labeling tool into its review platform being billed as the first step into integrating AI across the entire e-discovery process. Balachandran said the partnership with Leeds should help drive even more software innovation “pretty quickly,” especially being able to leverage the expertise of other companies in the Leeds portfolio.

“With this relationship, we can definitely amp it up, and make sure our customers and our employees benefit out of this relationship,” Balachandran added.

Exterro doesn't expect any immediate major changes through the deal. The company's original shareholders are all staying through this round, Balachandran said, as is the company's management. Indeed, from Balachandran's standpoint, the changes from the deal will all be forward-looking, and he said that the customers he's talked with have been excited.

“We just felt like the timing was right to get on the gas pedal and accelerate even further—accelerate our product roadmap for our customers,” he said. “We have some really big goals, from an e-discovery and information governance standpoint, to be a leader in the space, so we felt this was the right time to do it.”