Enterprise SaaS Transition Secures $4.7M CAD for Haloo

Haloo, a Toronto-based legaltech startup, recently announced it has secured $4.7 million CAD ($3.5 million USD) in early Series A funding. This significant investment is set to scale its advanced trademark search solution, allowing the company to further develop its product and maintain a competitive edge in the market.

The funding round was spearheaded by Innospark Ventures, a Boston-based venture capital firm with a strong focus on artificial intelligence (AI). Other key participants included the Crown corporation BDC through its Thrive platform, which is dedicated to supporting women entrepreneurs, and LOI Venture, co-founded by Ryan Holmes of Hootsuite and Manny Padda of New Avenue Capital. Existing investors, such as W Fund, also took part in this round, reinforcing their belief in Haloo's potential.

Haloo, initially launched under the name Heirlume, was co-founded by CEO Julie MacDonell and CTO Sarah Ruest. The startup began with a mission to help small businesses perform professional-quality trademark searches and file trademark applications. However, the company recently pivoted from its original direct-to-consumer approach to focus on an enterprise software-as-a-service (SaaS) model, catering primarily to lawyers, trademark agents, and large enterprises. This pivot came after the founders realized that their technology had broader applications and could be leveraged more effectively in the enterprise market.

The core of Haloo's innovation lies in its proprietary machine-learning model, which mimics the intricate human analysis required for comprehensive trademark searches. Trademark searching is a meticulous process that involves investigating existing trademarks to determine whether a proposed trademark is available for use and registration. Haloo's AI-driven platform significantly accelerates this process. As MacDonell explained, the platform can conduct ten trademark searches in under a minute, a task that would typically take around 12 hours of human effort. This capability not only enhances efficiency but also democratizes access to high-quality trademark search services.

MacDonell and Ruest’s decision to pivot the business model was fueled by their recognition of the immense potential of their AI technology. Initially, they sold directly to small business owners, but they soon discovered that their advanced technology could meet a much larger demand in the legal sector. In 2022, when Haloo raised its $2.9 million CAD seed round, the team realized that they could sell their services to law firms, trademark agents, and enterprises. This shift in focus opened up new opportunities and allowed Haloo to cater to a broader audience.

While the company continues to offer services to small businesses, it has repackaged these offerings into a white-labelled API. This API is marketed to domain registrars and other service providers targeting small businesses, allowing them to offer trademark search as an additional service when purchasing domains. This strategic move enables Haloo to maintain its presence in the small business market while focusing its primary efforts on the enterprise sector.

Throughout 2023, Haloo has been working to validate its new business model, and the results have been promising. The company now serves several hundred SaaS customers, including intellectual property teams in both law firms and enterprises. MacDonell declined to disclose specific names of these enterprise customers but emphasized that the platform is designed to support lawyers, trademark assistants, and paralegals, providing tools that streamline the trademark search process and enhance their productivity.

With the latest injection of capital, Haloo aims to scale its operations significantly. MacDonell expressed confidence that the company has achieved product-market fit and is now ready to expand its user base from several hundred to tens of thousands. To achieve this, Haloo plans to strengthen its sales and marketing efforts, as well as enhance its recruitment initiatives.

A notable addition to the Haloo team is Mark Jacobs, who joined as the chief revenue officer. Jacobs brings over two decades of experience in the intellectual property (IP) industry, having previously served as the senior vice-president of global commercial services at Corsearch. MacDonell described Jacobs’ recruitment as a major win for the startup, given his extensive experience and expertise in the field.

Jacobs' appointment is expected to play a pivotal role in driving Haloo's growth and expanding its market presence. His knowledge of the IP industry and proven track record in commercial services align perfectly with Haloo's ambitions to scale and solidify its position as a leader in the legaltech space.

Haloo's journey from its inception to its current enterprise-focused model highlights the transformative potential of AI in legal processes. By addressing the inefficiencies in traditional trademark searching, Haloo is not only enhancing the productivity of legal professionals but also democratizing access to high-quality trademark search capabilities. The company's innovative approach and advanced technology have positioned it as a key player in the legaltech industry.

Innospark Ventures, the lead investor in this funding round, has a strong focus on AI-driven innovations. Their investment in Haloo underscores the venture capital firm's belief in the transformative potential of Haloo's technology. The participation of BDC's Thrive platform highlights the importance of supporting women-led businesses, while LOI Venture’s involvement brings additional expertise and resources to Haloo’s growth journey.

As Haloo continues to scale, its focus will be on enhancing its sales, marketing, and product development efforts. The company aims to build on its current success and expand its user base, ultimately reaching tens of thousands of customers. With a strong team, innovative technology, and a clear vision for the future, Haloo is well-positioned to revolutionize the trademark search process and make a significant impact in the legaltech industry.

In summary, Haloo’s recent $4.7 million CAD funding round marks a significant milestone in the startup’s journey. With this new capital, Haloo plans to scale its operations, expand its market reach, and enhance its product offerings. The company’s pivot to an enterprise SaaS model and its focus on leveraging AI for trademark searches demonstrate its innovative approach and commitment to transforming the legaltech space. As Haloo continues to grow, it aims to democratize access to high-quality trademark search services and establish itself as a leader in the industry.