Brazil’s netLex aiming at Mexico, Colombia after Riverwood series B round

Brazil’s netLex, a platform for contract management, aims to expand in Mexico and Colombia in a regional push following a 126mn-real (US$23mn) series B round led by US private equity firm Riverwood Capital.

Announced on July 17, the capital allocation is said to be the biggest ever for a contract lifecycle management (CLM) company in Latin America. It adds to a series A round secured by netLex in 2021, led by US fund Parceiro Ventures.

"We already had a relationship with Riverwood and other funds, but they enticed us with this investment. It's all equity. And it comes to underpin our positioning in the market," netLex founder and CEO, Flávio Ribeiro, told BNamericas.

With the investment, Riverwood Capital’s VP Gustavo Pinheiro gained a position at netLex’s board.

“The increasing focus on automation and governance has significantly driven enterprise adoption of CLM solutions. We believe that contracts are at the heart of a major transformation through AI, which will further accelerate the adoption of CLM solutions,” Riverwood Capital co-founder and managing partner Francisco Alvarez-Demalde said in a statement.

Founded in 2014 in Belo Horizonte, netLex operates in Colombia, Argentina, Chile, Mexico, the US, UK, Spain, France, Germany and Norway, with clients reported in over 40 countries.

It now aims to use series B proceeds to enhance its portfolio, adding mostly new genAI-based capacity, and accelerate its international expansion, notably in Latin America. 

The legaltech claims to be the main CLM player in the region, with clients such as Ambev, Samsung, iFood and Localiza. According to Ribeiro, the company provides services to more than 100 of the 500 largest companies in Brazil, led by the finance, energy, oil and gas, and tech verticals.

Yet, only 10% of revenues are currently generated in markets other than Brazil. Ribeiro said that the goal is to get to 40% by 2027. In Latin America, the priorities are Mexico and Colombia.

GenAI

The opportunities with genAI to improve document and contract processing are immense, said Ribeiro. 

netLex currently builds its platform on top of the main LLMs in the market, such as ChatGPT, Cohere, LaMDA, for example. The idea is to diversify and add new features and capabilities to the contract lifecycle process.

“Around 10%, sometimes up to 30%, of the losses in a company are related to bad or poor contractual management,” Ribeiro said.

Within companies, netLex's platform is serving the legal department, as well as purchasing, supply and sales.

Riverwood's investment pushes up netLex’s market valuation, although this value has not been disclosed, and puts the company on track to become Latin America's first legaltech unicorn.

“It would be fantastic. And we do hope that this will happen. But we still have a lot to do,” said Ribeiro.

Founded in 2008, Riverwood has invested in over 80 companies to date. It has offices in Menlo Park, Miami and New York, and in São Paulo.