[Edaily Marketin Song Seung-Hyeon Reporter] Roan Company has been named the sole legal tech firm participating in a consortium for the government’s independent artificial intelligence (AI) foundation model project. The trend continues among legal tech firms that have secured venture capital (VC) funding to expand their reach through acquisitions and participation in government-led projects.

According to the VC industry on the 1st, the Ministry of Science and ICT announced the results of the second-stage evaluation for its independent AI foundation model project on the 18th of last month and confirmed that three elite teams—Upstage, SK Telecom, and LG AI Research—would advance to the third stage. As a member of the Upstage consortium, Law & Company is responsible for enhancing the performance of legal-domain models and expanding their adoption. In the first phase, the company participated in building a training and evaluation dataset specialized for the legal field, and in the second phase, it was tasked with refining the evaluation of legal data.

Legal tech companies that have secured investments from multiple venture capital firms are thus focusing their efforts on expanding their reach. First, in March of last year, Ro&Company acquired a 100% stake in RoTime BizTech—the operator of “RoTop,” a case management solution for law firms—for 15 billion won. By integrating the legal consultation platform “LawTalk,” the case law search service “BigCase,” and the legal AI “SuperLawyer” with law firm enterprise resource planning (ERP), the company has created a structure that unifies the entire workflow of attorneys into a single platform. Elbox, a major competitor, significantly increased its market share in this sector by acquiring the case law search service “CaseNote” in August 2024, and in November of last year, it shifted Elbox AI’s response-generation method to an agent-based structure that involves repeated searching and verification.

The funds for these expansions came from financing rounds conducted last year. Law & Company raised 35.997 billion won by issuing 406,493 convertible preferred shares between March 31 and September 1 of last year. Including the sale of existing shares, the disclosed size of the Series C-2 round is 50 billion won. Elbox raised 30 billion won in a Series C round last June.

Revenue at Ro&Company rose 65.4% year-over-year to 15.397 billion won on a consolidated basis, compared to 9.308 billion won the previous year. The operating loss decreased by 40%, from 9.488 billion won to 5.691 billion won. Since operating expenses rose by only 12.2%, from 18.797 billion won to 21.088 billion won, it appears that the increase in revenue directly contributed to the reduction in the deficit.

By segment, revenue from platforms such as LawTalk rose 16.8% to 10.002 billion won, while the SaaS segment—which includes BigCase, SuperLawyer, and LawTop—surged 7.25-fold from 744 million won to 5.394 billion won. The share of SaaS in total revenue rose from 8% to 35%. Of this amount, 2.463 billion won represents revenue generated by the acquired company, Lawtime Biztech, since the acquisition. Elbox reported standalone revenue of 7.9 billion won—double the previous year’s figure (3.94 billion won)—but its operating loss increased from 7.06 billion won to 9.99 billion won.

Although both are categorized as legal tech, the electronic contract sector is taking a different path. ModuSign’s revenue rose from 5.92 billion won in 2023 to 9.31 billion won last year. After securing a 17.7 billion won Series C funding round led by SBVA in May 2024, the company is expanding into the public and enterprise markets as well as AI contract management (CLM) without additional funding rounds or acquisitions.

The lifting of regulatory uncertainty is cited as one of the factors accelerating the expansion of legal tech. Last year, the Ministry of Justice issued guidelines outlining the standards for operating lawyer search services, and in response, Law & Company clarified the labeling of advertising sections and amended its terms of service to allow for reporting lawyers who have not provided consultations to the Korean Bar Association. With the business risks that remained following the Rotok incident now resolved, the company has gained room to move into adjacent areas.

A venture capital (VC) executive stated, “The current deficit is largely due to proactive investments in acquisitions and AI infrastructure, so it’s difficult to view it as a failure in cost control,” adding, “However, since the funds raised are sufficient for three to four years, revenue must reach a point where it covers costs within that timeframe.”