Crosby, a new AI-powered legal services startup, has emerged from stealth mode with a $5.8 million seed funding round led by Sequoia Capital. Unlike traditional legal tech companies that market software directly to law firms, Crosby positions itself as an innovative law firm that integrates internally built, advanced AI tools into its legal practice. The company’s goal is to dramatically streamline the contract review process, initially aiming to accomplish full reviews in less than an hour. Co-founder and CTO John Sarihan said the team’s ambition is to reduce that time even further, eventually achieving contract reviews within just minutes.
Co-founded by Ryan Daniels, a seasoned attorney who previously worked at the prominent tech law firm Cooley and has extensive experience managing legal work for growing startups, Crosby decided to launch its own law practice rather than simply providing AI software to existing firms. Daniels cited his prior experience as general counsel, noting that slow contract negotiations often became major bottlenecks that hindered his former company’s growth.
“Negotiations for contracts—master service agreements, sales agreements—consumed most of our legal resources and held back our expansion,” Daniels explained.
Recognizing the limitations of existing AI solutions, the founding team determined that building their own law firm would allow them comprehensive control over every aspect of the legal review process, achieving efficiency impossible under the traditional outsourcing model. Sarihan previously helped scale fintech startup Ramp, while Daniels drew from his legal background to recruit experienced attorneys alongside engineers from established tech startups. Currently, Crosby employs a team of around 19 people.
Since quietly launching operations in January, the company has already handled reviews for more than 1,000 contracts, including master service agreements, data processing agreements, and non-disclosure agreements. Crosby’s client roster includes rapidly growing startups such as sales automation firms Clay and UnifyGTM, as well as Cursor.
The seed round was spearheaded by Sequoia partners Josephine Chen and Alfred Lin and included participation from Bain Capital Ventures, alongside several high-profile angel investors. Notable angel contributors include Ramp co-founders Eric Glyman and Karim Atiyeh, Opendoor’s Eric Wu, Casetext’s Jake Heller, Instacart’s co-founder Max Mullen, and Flatiron Health’s Zach Weinberg and Gil Shlarski.
Deep connections led Sequoia to invest: Josephine Chen had worked with Sarihan at Ramp, and also knew Daniels through Venue, an AI procurement company later acquired by Ramp. When presented the Crosby pitch, Chen quickly verified her instincts through Sequoia’s in-house attorney Cindy Lee, who also knew Daniels from his Cooley days.
Chen expressed confidence not just in the expansive legal services market—estimated at approximately $300 billion annually—but also in Crosby’s approach, particularly how effectively generative AI could streamline notoriously cumbersome contract-review processes. “Contract negotiation bottlenecks are something we’ve seen repeatedly in our portfolio companies. This use-case is essentially tailor-made for leveraging large language models,” Chen said.
Ultimately, Crosby’s combination of top engineering talent, experienced legal professionals, and internal AI development positions it to significantly shake up the traditionally slow-moving legal industry.
