Reviewing repetitious paperwork is tedious, but Klarity thinks that humans shouldn’t have to. The company is developing an artificial intelligence tool that converts documents into structured data and is aimed at finance and accounting organisations.
The notion of document automation is not new. Although there was an initial wave of startups working on partial document automation that still required human inspection, Ondrej Antos, co-founder and CEO of Klarity, stated that the complete document automation sector is still in its infancy.
“Due to the low value of their offering, partial document automation firms could not attain significant scale,” he added via email. “Full automation has the potential to replace human review for the great majority of papers — over 85 percent in Klarity’s instance — while also improving accuracy. This adds a lot of value not just for huge corporations, but also for mid-sized businesses that handle a few hundred papers every month, and so the market is considerably larger.”
Klarity was formed in 2017 by Antos and Nischal Nadhamuni, whom he met at MIT. They became friends after Antos’ experience as a corporate lawyer requiring him to evaluate vast volumes of data. Nadhamuni was researching Natural Language Processing and believed it might be used to help computers interpret papers more effectively than humans. The product will be available in August 2020.
For processes that need large-scale document inspection, such as accounting order forms, purchase orders, and agreements, Klarity substitutes people. Instead of having a team of accountants examine thousands of almost similar papers every month to look for non-standard language, Klarity handles it for them, saving time and reducing errors.
Klarity raised fresh funds to spend in sales and marketing to expand and continue investing in R&D during the previous nine months, seeing its annual recurring revenue climb nine times and over 24 times year over year. It also works with more than 40 business and mid-market clients, including Koupa, Optimizely, and 808.
Tola Capital led a 18 million Series A fundraising round for the startup today. Sheila Gulati, the founder and managing director of Tola Capital, joins the board of directors of Klarity as part of the investment. Klarity has raised little over 20 million to far.
Invus Opportunities and a group of private investors, including executives from its clients 808 and Koupa, have also joined the round as new investors. Elad Gil, Daniel Gross, Nat Friedman, and Picus Capital are among the existing backers.
The organisation is looking for sales, marketing, and engineering talent. It now employs 34 people, up from 14 a year earlier. In late 2022, it plans to roll out additional document review automation use cases for deal desk, renewals, and procurement teams.
“Today, the great majority of businesses are unaware that this pervasive issue has a technology answer,” Antos stated. “We will continue to create a market-leading product while also helping to educate the industry that there is a technology answer to the age-old issue of document review by accounting teams.”