Blog
by Tony Florence, Alex Sharata and Mia MansourJul 23, 2024
NEA makes US $500M+ equity investment in the largest-ever round for a legal software company.
Clio represents marquee investment for NEA’s dedicated $3.2B growth fund focused on backing high-growth, market-leading companies with scaled revenue.
NEA’s growth practice has a flexible mandate and can typically invest $50 to $300M or more in minority investments, majority buyouts, recapitalizations, and other transaction types.
Today, we are excited to announce NEA’s US $500M+ investment in Clio, the category leader in cloud-native Legal Practice Management software. NEA led the US $900M round, which marks the largest capital raise for cloud legal software and one of the top five largest for a vertical software company in history. In conjunction with the financing, NEA’s Co-CEO Tony Florence will join the company’s board of directors.
Clio’s platform acts as a “System of Record” that powers law firms across every aspect of the legal process including client intake, case management, document automation, legal payments, accounting, and more. The company is meaningfully scaled with over a couple hundred million in ARR, 150,000+ legal professionals globally, and 1,000+ mid-sized firms in the U.S. alone.
Clio’s CEO, Jack Newton, is a visionary founder whose passion for transforming the legal industry with cloud computing and AI aligns perfectly with our mission to support entrepreneurs seeking to accelerate innovation and build category-defining businesses. NEA will partner closely with Clio’s team as they continue moving upmarket, bolstering their payments and fintech offerings, advancing their AI capabilities, and deepening global market penetration.
At its core, NEA is a team of company builders who seek to add value throughout a company’s lifecycle, from seed to IPO and beyond.
When NEA unveiled two new funds exceeding $6.2B in early 2023, it marked the largest capital raise in the firm's history, increasing total assets under management to over $25B. Our early-stage fund targets investments from incubation and seed to Series B, and our dedicated $3.2B growth fund targets later-stage opportunities from Series C onward in key sectors where we have extensive investing heritage, such as mission-critical application and infrastructure software, disruptive fintech solutions, game-changing consumer platforms, as well as digital health and life sciences.
Today, we not only invest across a wide range of stages, sectors, and geographies but an expanding set of transaction types. Our flexible mandate allows us to make investments ranging from $50 to $300M or more, and we can tailor transactions to align with a company’s long-term goals, including minority investments, majority buyouts, recapitalizations, and more.
We believe what sets NEA apart is our founder-first mindset, nurtured process, deep-rooted network, and domain expertise. We leverage a unique company-building approach, team-oriented culture, and access to the entire NEA platform. Whether it’s at the early or growth stages, we bring the full weight of NEA’s network and resources to bear for our companies. This includes a seasoned bench of venture partners, operators, and advisors – as well as an Impact Team who partners closely with management to drive business velocity and value creation across functions including GTM, business development, talent, design and more. With our comprehensive support model, we provide more than just capital but also strategic resources and expertise to fuel growth and innovation at various stages of a company’s journey. We have always enjoyed a flexible approach to partnering with founders, adapting our value-add to the stage and specific needs of each business.
Investments we’ve made over the past five decades have many shared characteristics, mainly exceptional founders and teams building disruptive solutions in large, fast-growing markets. For growth investments, we look for companies that are inflecting beyond product-market fit, scaling their go-to-market engines efficiently, continuing to innovate at a rapid clip, and widening their competitive moats. We target companies with “platform” potential, proven commercialization with scaled revenue typically greater than $25 to $50M, high retention, and robust growth – ideally growing 25% to 100%+ with Rule of 40+ profiles often and line of sight into mature unit economics that unlock durable and profitable growth over time.
Clio embodies everything NEA looks for in a growth-stage investment: exceptional team, clear market leadership, and stellar business and financial physics. Welcoming Clio into the NEA portfolio underscores our commitment to companies with generational potential that are capitalizing on secular trends and capable of being long-term compounders that create billions of dollars in market cap as enduring franchises.
We couldn’t be more excited to partner with the entire Clio team on this next phase of growth.
Disclaimer
The information provided in this blog post is for educational and informational purposes only and is not intended to be investment advice, or recommendation, or as an offer to sell or a solicitation of an offer to buy an interest in any fund or investment vehicle managed by NEA or any other NEA entity. New Enterprise Associates (NEA) is a registered investment adviser with the Securities and Exchange Commission (SEC). However, nothing in this post should be interpreted to suggest that the SEC has endorsed or approved the contents of this post. NEA has no obligation to update, modify, or amend the contents of this post nor to notify readers in the event that any information, opinion, forecast or estimate changes or subsequently becomes inaccurate or outdated. In addition, certain information contained herein has been obtained from third-party sources and has not been independently verified by NEA. The companies featured in this post are for illustrative purposes only, have been selected in order to provide an example of the types of investments made by NEA that fit the theme of this post and are not representative of all NEA portfolio companies. The company founders or executives or any other individuals or third-party companies featured or quoted in this post are not compensated, directly or indirectly, by NEA but may be founders or executives of portfolio companies NEA has invested in through funds managed by NEA and its affiliates. Any statements made by founders, investors, portfolio companies, or others in the post or on other third-party websites referencing this post are their own, and are not intended to be an endorsement of the investment advisory services offered by NEA.
NEA makes no assurance that investment results obtained historically can be obtained in the future, or that any investments managed by NEA will be profitable. To the extent the content in this post discusses hypotheticals, projections, or forecasts to illustrate a view, such views may not have been verified or adopted by NEA, nor has NEA tested the validity of the assumptions that underlie such opinions. Readers of the information contained herein should consult their own legal, tax, and financial advisers because the contents are not intended by NEA to be used as part of the investment decision making process related to any investment managed by NEA.
