Glendale online legal technology company LegalZoom.com Inc. announced June 31 it completed a $500 million financing round from four total investors, its second since the firm’s founding in 2001. With this investment, LegalZoom’s estimated value totals roughly $2 billion.
The funding efforts were led by San Francisco-based Francisco Partners and London’s GPI Capital, with participation from Kleiner Perkins Caulfield and Byers; Institutional Venture Partners; Franklin Templeton Investments; and Neuberger Berman.
Initially, LegalZoom was valued at $440 million in 2012 and was set to file for an IPO that year, before private equity outfit Permira Holdings acquired a controlling stake in the company for a reported $200 million and the filing was subsequently withdrawn. Permira participated in this selling round but will still remain LegalZoom’s largest shareholder.
“LegalZoom’s business model has gone through an impressive evolution since we first met them five years ago,” Dan Searle, chief executive and analyst at Franklin Templeton Investments said in a press release. “They are a clear category leader with a mission to make legal services more affordable and accessible for small businesses and families,” Searle said, adding that Franklin Templeton thinks this is “an exciting time to be investing in the company as both the business and pace of innovation are accelerating, with a substantial opportunity still ahead that should produce long term value creation for our Franklin Templeton shareholders.”
Specific terms of the deal were not disclosed, but following the investment completion former L.A. Lakers star Kobe Bryant’s venture capital firm Bryant Stibel will retain its entire ownership stake in LegalZoom. Additionally, Dipanjan “DJ” Deb and Neil Tolaney from Francisco Partners will join LegalZoom’s board as part of the deal with Khai Ha from GPI Capital.
“Delivering valuable solutions that naturally evolve into deeper relationships with customers has resulted in a rare combination of healthy profitability and accelerating revenue growth” commented LegalZoom chief executive John Suh, who emphasized that his company is “excited to partner with an impressive set of new growth equity investors that will support our efforts to democratize law.”