Reviewing repetitive documents is, well, repetitive, but Klarity believes that people don’t have to do all that and is building an artificial intelligence tool, aimed at finance and accounting departments, that transforms documents into structured data.
Document automation is not a new concept. There was an original wave of companies working on partial document automation, which still needs a human overhaul, but Ondrej Antos, co-founder and CEO of Klarity, explained that the market for full document automation is still very nascent.
“Partial document automation companies haven’t achieved much scale due to the limited value of their product,” he said via email. “Full automation has the ability to replace human review for the vast majority of documents — over 85% in Klarity’s case — and with greater accuracy. This generates a lot of value, not only for large companies, but also for medium-sized companies that have a few hundred documents every month and therefore the market is much larger.”
Antos founded Klarity in 2017 with Nischal Nadhamuni, whom he met at MIT. They were joined by Antos’ experience of having to review large amounts of data when he was a corporate attorney. Nadhamuni was studying Natural Language Processing and thought it could be applied to understanding documents better than humans. In August 2020, the product was released.
Klarity replaces humans for tasks that require large-scale document review, including accounting order forms, purchase orders, and agreements. Instead of having many accountants read thousands of nearly identical documents every month to find non-standard language, Klarity does just that, helping accountants save time and avoid mistakes.
Over the past nine months, the company has seen its annual recurring revenue grow nine times and more than 24 times year over year, leading Klarity to raise new capital to invest in sales and marketing to scale and continue investing in R&D. It is currently also working with over 40 midsize and corporate clients, including Coupa, Optimizely and 8×8.
Today, the company announced $18 million in a Series A funding round led by Tola Capital. As part of the investment, Sheila Gulati, founder and managing director of Tola Capital, joins the board of directors of Klarity. To date, Klarity has raised just over $20 million.
New investors also participate in the Invus Opportunities round and a group of individual investors, including executives from its clients 8×8 and Coupa. Existing investors who follow include Elad Gil, Daniel Gross, Nat Friedman and Picus Capital.
The company is focused on contracting sales, marketing and engineering. It has 34 employees, against 14 a year ago. It is also ready to launch new document review automation use cases for negotiation, renewals and procurement teams in late 2022.
“Today, the vast majority of companies don’t even realize that there is a technological solution to this ubiquitous problem,” said Antos. “We will help educate the market that there is a technical solution to the age-old problem of document review by accounting teams and continue to build a market-leading product.”