From Work-Bench: The State of Enterprise Tech in NYC, 2022 Funding Report

All of enterprise software business has a nexus with New York City. I recommend reviewing the publications from Work-Bench, the NYC based venture capital whose tag line is, “We invest in game changing enterprise startups.” They are data-oriented people with interesting insights on funding for NYC-based enterprise tech startups.

Work-Bench has recently published “The State of Enterprise Tech in NYC: 2022 Funding Report.” You can download if for free with a registration here. It’s quite visual and a quick read.

Let’s look at the key data for last year. In 2022, $6.2B was raised in enterprise tech in NYC. This is less than half of what was raised in 2021 at $16.7B, but more than in 2020 and 2019. Total deals ere also down in 2022 to 163 from 237 in 2021.

Below is the “money chart.”

Work-Bench NYC Enterprise Software Startup Funding: 2014 – 2022

2022 funding was weaker for large growth stage rounds.

Series C and above rounds went off a cliff: 24 in 2022; 78 in 2021.

Series B increased slightly to 40 in 2022 from 39 in 2021.

Seed and Series A rounds were close to 2021 levels.

The Work-Bench report includes detailed data by round type.

The data in the report is reported by full year. I suspect that if we were to see the data by quarter we would see that the first half of 2022 was an extension of 2021 investment rates, with the second half of 2022 slower.

You can click through to the Work-Bench NYC Enterprise Tech Enterprise Tech Index. Here’s a chart from the index showing the top publicly traded enterprise companies in NYC. The first three are Datadog, MongoDB, and UIPath.

Work-Bench New York City Enterprise Tech Index Top Public Companies

Those of us in the legal tech sector see the parallel in investment to Work-Bench’s data. I keep an informal log of investment in legal tech. In that log, investments in broadly legal tech companies in the second half of 2022 were at half the rate of the first half of 2022.

A final thought from Work-Bench’s 2022 report, “There were no meaningful exits across M&A and IPOs.”

We can see now that 2021 was over-heated. We are living through the consequences of that excess growth funding now, as in the layoffs in tech companies and slowdown in M&A and IPOs.


We have FOMO in legal tech! 🦄

What is FOMO?

Fear Of Missing Out

Today’s legal tech headline:

“Litera secures further investment from Hg”

Terms of the deal were not disclosed. But we know that:

  • May 2019: Hg purchased Litera investment firm K1 Investment Management. At the time Hg Capital Trust stated that as part of the acquisition, it would lead an investment of $39M in Litera.
  • Litera has trebled in size, per CEO, Avaneesh Marwaha.
  • And from the same press release:
  • Litera is approaching more than 1,000 employees across 17 different countries
  • Litera also has gained over 10 times the number of users since Hg first invested, now serving over 15,000 customers
  • Since 2019, Litera has acquired twelve companies.

And there are 🦄 unicorns in legal tech!

November 2021: Everlaw raised a $202M Series D round at a valuation over $2B.

June 2021: Verbit raised $157 million in Series D funding at a valuation of over $1B.

April 2021: Clio raised a $110M Series E round at a valuation of $1.6B.

December 2020: Ironclad raised $100M in Series D funding at more than $950M valuation.


To quote investor Kjartan Rist on FOMO, “The fear of missing out on the next billion-dollar opportunity is one feeling that never really goes away.

FOMO is nothing new in Silicon Valley VC-land. But it’s new and exciting in the world of what is broadly referred to as “legal tech.” Legal tech has been known for slow adoption and conservative processes, including mainly using software which is deployed on-premises at the law firm or business entity. In many cases this changed with the pandemic. The overnight necessity to support attorneys and staff working from home catalyzed adoption of cloud-hosted software throughout legal.

My short summary of the phenomenon in legal tech:

☁️ Cloud scales = hyper growth potential

💉 Accelerated by the pandemic

⚖️ Legal (law firms, corporate legal) finally accepts Cloud/SaaS

💰 Capital wants in

🙌 Win / Win / Win

There’s more to this story. For example, FOMO leads to frothy valuations.

But for today…

🥳 Congratulations to the unicorns, the parties to M & A, the newly funded, and the rapidly growing companies in #legaltech! It’s an exciting time to be in legal tech.