Legal tech startup Clio advances its FinTech play with launch of payments product in Canada
Clio claims to have processed over $1 billion USD in legal transactions.
A year after Clio launched Clio Payments in the United States, the startup is making the payment product available in Canada.
Clio, a provider of cloud-based legal technology, noted the product roll-out in Canada is the startup’s first step to international expansion for legal payments. Clio Payments in Canada also marks the progression of the startup as it expands into the area of FinTech products.
“Payments is an integral part of our centralized platform.”
– Jack Newton, Clio
Jack Newton, Clio’s CEO and founder, previously told BetaKit that outdated paper invoices and payment processes caused lawyers difficulties when it came to billings and getting paid. At the same time, clients sometimes struggled when they had to pay in a lump sum, and, as well, could experience difficulties understanding fees.
When Clio originally developed its payment product, a third-party processor powered it. But Clio described the offering as limited in that it only accepted credit card payments, and had a slow onboarding process as well as a complex pricing model.
Clio decided to build its own platform from the ground up. The resulting system not only addressed the previous issues, but added other features such as the ability for clients to pay in installments.
In fact, these days Clio is beginning to look more like a FinTech in legal tech clothing. In addition to general law practice management tech, the startup’s offerings include a legal accounting software package that helps legal firms manage client funds in trust accounts, and helps track billing as well as time and expense tracking.
Newton said that through Clio’s work with hundreds of thousands of legal professionals, the startup knows the most frequent point of friction in relations between attorneys and clients is collections.
“Financial matters bear a heavy burden on firm operations, time, and revenue,” Newton said. “Bringing payments to the Canadian market has the potential to fundamentally change where legal professionals spend their time—and who can access legal services. Canadians can now benefit from a better payment experience when dealing with their legal matters.”
Clio launched its payments solution in the US in 2021 at the Clio Cloud Conference, kickstarting the startup’s expansion into financial services for the legal industry. The startup claims to have processed over $1 billion USD to date in legal transactions with continuing steady growth.
“Clio has steadily grown to solve the pain points between lawyers and clients by providing seamless and efficient solutions at every point of the client journey,” Newton said. “Payments is an integral part of our centralized platform.”
According to Newton, most legal payment services are complex and disjointed. Clio’s goal is to offer a seamless collections and payment experience while making legal services more accessible.
Founded in 2008, Clio is headquartered in Burnaby, British Columbia, and currently employs over 800 people in four offices around the globe.
Clio gained unicorn status in 2021 following its Series E raise of $136 million CAD, and then in June surpassed $100 million USD in annual recurring revenue to achieve status as a centaur. The startup has raised $386 million in capital since 2008, including a $250 million USD funding round, which Clio claimed in 2019 was the largest for a Canadian startup at the time.
Clio maintains that acquisitions are core to the startup’s business model, and that its merger and acquisition strategy aligns directly with its goal to accelerate its product offerings. In 2021, The startup acquired Lawya, which creates digital workflows for legal documents, and automated court calendar startup CalendarRules. Clio also acquired client intake and relationship management startup Leicata in 2018.
The startup beefed up its executive suite in anticipation of its next phase of growth in 2021, bringing in talent with experience from Uber, Airbnb, Lightspeed, and PointClickCare to act as its COO, and chief people officer. Clio also added former Clearco CFO Curt Sigfstead as its CFO in 2022.
Sigfstead brought public market CFO experience to Clio, and at the time he joined, Newton was not definitive about Clio’s IPO plans but called it a possibility. The CEO noted that Clio had “a lot of those ingredients already in place” to go public “on a moment’s notice,” but noted the startup would only go public when the time was right.
But by late March, Newton told BetaKit that the window of opportunity for an IPO had passed. To be sure, by the time Clio put any IPO plans on pause, Hootsuite had also arrived at the same decision in late 2021.
And no wonder: Although 2021 saw numerous tech firms go public, by the end of the year not many had much to show for it. The Globe and Mail reported the average return for a tech sector IPO in the past year was minus 2.4 percent compared to 16 percent for the average stock market. The same market downturn caused Sharethrough to postpone its IPO as well.
When it comes to Clio Payments, Newton said the product has had strong traction in the US with legal professionals there taking advantage of using the “ease, security and effectiveness” of payment processing in the cloud.“Now, with our launch in Canada, we can extend these significant benefits to our Canadian customers,” Newton said.