Of all the businesses to start after cofounding Twitch and then serving as a partner at Y Combinator, a law firm seems an unlikely choice. But for Justin Kan, legal tech startup Atrium is solving a problem he felt acutely as a founder. And it’s raising money like one of the hot startups in Silicon Valley.
Atrium is announcing on Monday that it has raised $65 million in a round led by Andreessen Horowitz, with Y Combinator’s Continuity Fund, Sound Ventures and General Catalyst joining the round.
The funding comes as Atrium has helped some of tech’s fastest-growing companies raise a combined $500 million, including scooter company Bird, Alto, MessageBird and Sift Science—250 clients overall. Atrium served as the law firm for each, providing a lawyer on the customer end and using technology to automate some of the related filings under the hood. The startup will use the funding to hire more employees on both its legal services and technical sides.
“This was a problem I’d seen in my own experiences, where all these parts around legal were like a blocker to what I wanted to do, and the legal bills felt like Russian roulette,” says Kan. “It’s almost like a tax you have as a business owner. That’s why I wanted to attack this problem.”
Founded in mid-2017 after Kan left Y Combinator to do a startup incubator, Atrium’s full stack law firm approach means that it’s got an unusual mix of legal-trained employees, business operations professionals and engineers. Kan’s cofounders Augie Rakow and Nick Cortes come from backgrounds at law firm Orrick, where Rakow represented Cruise in its $1 billion acquisition by GM, and McKinsey.
Atrium started with startup financings and now includes commercial contracts, blockchain and outside counsel in its offerings to clients. The startup looks to capitalize on the difficulty of progressing to partner in big law firms by offering associates and senior associates a way to work with more clients, faster, using technology to automate much of the menial work with which they spend much of their billable time.
“One of the things big law partners say when they talk about Atrium is that we get people who wouldn’t make partner,” says Kan. “And I say, they’re the people who are doing the work for you anyway, but they transition out because they hate the lifestyle.”
Through Kan’s Twitch and YC background, Atrium has had an inside track with tech’s elite. It’s first funding round last fall raised $10.5 million; in the new funding, Andreessen Horowitz partners Marc Andreessen and Andrew Chen and Y Combinator CEO Michael Seibel join its board. Kan says he’d wanted a chance to work with Andreessen Horowitz directly for the first time; Seibel is a college pal who cofounded Justin.tv, the predecessor to Twitch, with Kan and several others.
What’s less obvious, however, is why Kan would want to move so aggressively on another startup idea after the success of Twitch and despite his continued love for spending time with entrepreneurs at YC. Less than two years ago, he thought he’d be working on a bunch of startups at once; now he co-employs more than 100 people in an area in which he has no formal background.
Kan says he tried retirement before Twitch and it wasn’t for him. “I lasted six weeks, skiing and playing [card game] Hearthstone,” he says. But in part inspired by his upbringing as well as books by business leaders like Ray Dalio, Kan says he wanted to struggle through the startup journey again in order to personally grow. “I still want to swing for the fences,” he says.
And Kan insists that despite the optics—larger-than-average fundraises, fast hiring and big-name clients—his pedigree and connections haven’t made Atrium’s journey one without struggle. The company turned over some of its early employees, he says, and has had to struggle to set a culture and hierarchy with so many staff from different corporate worlds. “There’s a lot of learning for everybody,” he says.
As for the unusual domain, Kan says that when he helped start Twitch, he didn’t like watching streamed games. He’s more interested in market opportunities and the underlying tech, he says—and law, with a total market of about $450 billion, is big enough to catch the eye. Quips Kan: “I’ve come to appreciate lawyers a lot more than I had.”