Reviewing repetitive documents is, well, repetitive, but clarity believes that humans don’t have to do any of that and is developing an artificial intelligence tool targeting finance and accounting departments that turns documents into structured data.
Document automation is not a new concept. There was an initial wave of companies working on partial document automation that still needs human verification, but Ondrej Antos, co-founder and CEO of Klarity, explained that the market for full document automation is still very much in its infancy.
“Companies with partial document automation haven’t achieved much because of the limited value of their product,” he said via email. “Full automation can replace human review for a large majority of documents – over 85% in the case of Klarity – and with greater accuracy. This generates a lot of value, not only for large companies, but also for medium-sized companies who have a few hundred documents every month and therefore the market is much larger.”
Antos founded Klarity in 2017 with Nischal Nadhamuni, whom he met at MIT. She linked Antos’ experience when he had to review large amounts of data as a corporate lawyer. Nadhamuni studied natural language processing and thought it could be applied to understand documents better than humans. The product was launched in August 2020.
Klarity replaces people for tasks that require extensive document review, including accounting order forms, purchase orders, and agreements. Instead of having many accountants read thousands of nearly identical documents each month to find non-standard language, Klarity does it, helping accountants save time and avoid errors.
An example of Klarity’s document automation. Photo credit: clarity
Over the past nine months, the company has seen annual recurring revenue growth of 9x and over 24x year-on-year, prompting Klarity to raise new capital to invest in sales and marketing to scale and continue research and development to invest in development. It also currently works with more than 40 enterprise and mid-market customers including Koupa, Optimizely and 8×8.
Today the company announced $18 million in a Series A funding round led by Tola Capital. As part of the investment, Sheila Gulati, founder and CEO of Tola Capital, will join Klarity’s board of directors. To date, Klarity has raised just over $20 million.
New investors also joining the round are Invus Opportunities and a group of individual investors including executives from its clients 8×8 and Koupa. Existing investors to follow include Elad Gil, Daniel Gross, Nat Friedman and Picus Capital.
The company focuses on hiring sales, marketing and engineering. It has 34 employees, up from 14 a year ago. It’s also poised to launch new document review automation use cases for deal desk, renewal, and procurement teams in late 2022.
“Today, the vast majority of companies are not even aware that there is a technological solution to this pervasive problem,” said Antos. “We will help educate the market that there is a technical solution to the age-old problem of document review by accounting teams and continue to develop a market-leading product.”
