Robot Lawyer DoNotPay, Valued at $210 Million, Plans to Target Small Businesses

By | August 2, 2021

DoNotPay, a startup that describes itself as a robot lawyer striving to beat bureaucracy, has more than doubled its valuation to about $210 million, according to Chief Executive Officer Joshua Browder.

The firm raised $10 million from Andreessen Horowitz, Lux Capital, Tribe Capital, Day One Ventures and Felicis Ventures, Browder said in an interview. They were joined by investors including billionaire FTX CEO Sam Bankman-Fried, former Coinbase Global Inc. Chief Technology Officer Balaji Srinivasan and UiPath Inc. CEO Daniel Dines. Yuri Milner’s investment firm, DST Global, also participated in the round, people with knowledge of the matter said.

DoNotPay, which has about 250,000 customers and charges an annual subscription fee of $144, intends to use the funding to bolster its customer base to include small businesses. The move was motivated by a class action that DoNotPay defeated earlier this year, Browder said, noting that the startup can ensure companies comply with various regulations, such as displaying appropriate disclaimers on their websites, and protect their intellectual property through trademarks.

“We realized businesses are being shaken down all the time,” he said.

Browder, 24, founded DoNotPay in 2015 after moving to study at Stanford University and receiving a flurry of parking tickets — which its technology now challenges. Its name originally stood for “do not pay parking tickets” but morphed into another ethos: Do not pay lawyers.

“The legal system shouldn’t be pay-to-play,” he said, referring to the costly billable hours that can be prohibitive for many people or small businesses. “We’re trying to be a general counsel for all, similar to the way Intuit is leaned on as a tax adviser. We want to stop people from being ripped off and give them leverage.”

U.K. Expansion

The company is profitable and hasn’t spent the $12 million it raised last year, though it expects to book losses as it invests to fuel growth, Browder said. While its near-term focus remains in the U.S., DoNotPay has ambitions to expand to the U.K., possibly within the next 12 months, he said.

The introduction of new federal and state regulations has been a boost for the company, he said, acknowledging that in Florida, robocallers have been banned from making contact without written consent. DoNotPay has about 200 products, including one dubbed “Robo Revenge,” which Browder describes as a honey trap: The startup provides users with credit-card details that, when processed by a telemarketer, can be used to obtain their details and sue them in small-claims court.

The company makes legal support “accessible not just to the privileged, but also to the average person,” said Masha Drokova, a general partner at Day One Ventures.

The term “mission-driven” is often overused in Silicon Valley, “but not in this case,” Niki Pezeshki, general partner at Felicis Ventures, said in an emailed statement, referring to DoNotPay’s commitment to expanding legal rights for underserved communities. “People have apps to do almost anything, but consumer rights is one of the last few untapped opportunities.”

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