Clio Surpasses $4 Billion CAD Valuation with Largest Funding Round in Canadian Tech

Clio, already one of Canada's highest-valued technology startups, has announced that its recent Series F funding round solidifies its position as the most valuable cloud-based legaltech company globally. With this new capital injection, the Burnaby, BC-based unicorn is now valued at over $4 billion CAD ($3 billion USD).

The $1.24 billion CAD ($900 million USD) Series F funding round is notable for several reasons. Not only is it the largest software funding round in Canadian tech history, surpassing Toronto-based 1Password's $744 million CAD Series C round in 2022, but Clio also claims it is the largest capital raise ever for cloud legal software. Additionally, it ranks as one of the top five largest fundraises for vertical market software companies and is the biggest growth equity capital raise in Canadian history.

This all-equity round was financed entirely by new United States investors, with New Enterprise Associates (NEA) leading the charge, supported by Goldman Sachs Asset Management, Sixth Street Growth, CapitalG, and Tidemark. The funding comes on the heels of Clio surpassing $200 million USD in annual recurring revenue (ARR), doubling from $100 million USD in 2022.

Tony Florence, NEA Co-CEO, praised Clio, saying, "We view Clio as a best-in-class, generational software business." Clio's co-founder and CEO, Jack Newton, emphasized the strategic nature of this round, aiming to attract investors with the expertise to help the company scale from $200 million USD in ARR to a billion dollars and beyond.

Historical data from the Canadian Venture Capital and Private Equity Association and RBCx highlight that this round is the largest Canadian tech funding round on record. Previous significant rounds include Wealthsimple's $750 million CAD round, Cohere's recent $688 million CAD Series D, and Trulioo's $476 million CAD Series D.

However, it is essential to note that Clio's Series F round is "substantially secondary," meaning it included a combination of primary and secondary capital. This mixture aims to create liquidity for existing investors and employees. Newton mentioned that Clio has previously conducted secondary financings in 2019 and 2021 for similar reasons. Existing investors like TCV, JMI Equity, T. Rowe Price Associates, and OMERS Growth Equity remain shareholders, with no exits in this round.

Tony Florence of NEA, who will join Clio's board as part of the round, highlighted the significance of this transaction, stating, "This represents a really big, important strategic transaction for the company and obviously for the software industry overall, and we’re thrilled to be leading it." NEA has contributed $688 million CAD (over $500 million USD) towards this round.

Clio, which provides cloud-based legal practice management software, aims to streamline law firm management by centralizing client intake, case management, document management, legal payments, and other essential functions. Newton attributed Clio's growth to its efforts in expanding its customer base and its multi-product platform strategy, which has driven more revenue from existing clients.

Since its $136 million CAD Series E round over three years ago, Clio has significantly expanded its operations. The company has ventured into the Asia-Pacific region, moved upmarket, enhanced its leadership team, introduced numerous new offerings, completed acquisitions, launched an investment fund, and developed a payments business. Currently, Clio serves over 130 countries, supports more than 1,000 mid-sized law firms in the US alone, and processes "billions of dollars" annually in legal transactions.