Ravindra Mehta, 23, got his first job in one of the reputed startup companies in India. He received his first-ever job contract, placed it in his document file and forgot about it.
Three years later, Mehta, now armed with job experience, decided to quit his job and launch his own firm in the same space.
However, when he revealed his future plans to the HR department of his company during the exit interview, he was informed that he can’t take up any freelance project in the same space for six months after exiting the company.
The HR department presented him the contract papers he had signed and forgotten at the time of joining the company, which contained the clause – hidden in legal jargon.
Mehta realised his mistake of not getting the papers scrutinised by a legal expert before signing on the dotted line.
Shashank Bijapur and Madhav Bhagat founded a company called SpotDraft – an online platform for drafting and executing contracts – specially to help people avoid such entanglements.
They believe that such kind of intricacies can be resolved through the platform. “We are a legal tech company to creates, analyse and manage contracts. Besides, the platform also creates invoices and tracks payments (automated tracking and reminders),” said Bijapur, Founder and CEO, SpotDraft. He is a Harvard Law School graduate and a former corporate lawyer from New York-based White & Case.
He explained that under contract drafting, the platform gives businesses a solid template through which they can draft and negotiate a contract on their own.
Users can also analyse existing contract templates, where the platform’s AI points out missing important clauses, summarises the key terms, sifts through clauses and gives a better understanding of the paper.
Its AI creates a smart box of all contracts and notifies the user on important actions such as regulatory filings and upcoming deadlines, among others.
Bhagat, CTO and Cofounder, SpotDraft, says the platform has smoothened the contract process – a work earlier undertaken only by expensive lawyers, who would rip off the draft template from the internet, usually with mistakes.
He also shared the story that led to the development of SpotDraft.
How was the concept formulated?
Two years ago, Bhagat, who was then employed with Google New York as the Tech Lead, was visiting India when his father, a businessman, offered him a company contract to study.
He found that the contract, which was made in Uttar Pradesh, had Delhi written all over it. It was clearly a shoddy job by the lawyer, who had copied the contract from the internet and drafted it without going through it properly.
Bhagat, who knew Bijapur then, discussed the gap in the industry and thought of replacing it with an effective system, converging corporate law with technology.
In January 2017, the duo came up with SpotDraft, which could draft solid contracts, chosen from hundreds of templates.
Market validates the concept
In less than a year’s time, the company claims to have over 5,000 signups and to have completed more than 4,500 contracts with a GMV of executed contracts of worth $700,000.
For now, the focus is on the freelance market, however, the target base will soon grow to include small and medium-sized businesses.
The company is currently following the freemium model and charges based on the frequency of usage. For small businesses, it has fixed the price at Rs 799 per month, which reaches up to Rs 1,499 per user per month for larger enterprises.
It has various business models for various categories, such as enterprise edition, premium integration and API edition.
Last week, it also secured $550,000 from venture capital firm Hunch Ventures. The seed funding round saw participation from Japan-based Spiral Ventures, 500 Startups, Singapore Angel Network, Citrus Payments and Cube founder Satyen Kothari.
Bijapur and Bhagat observe that there is a huge market opportunity in the corporate law sector and it can be tapped using technology.
Banks, corporates, startups, freelancers and various businesses need platforms which can help them create watertight contracts, generate follow-up documents, streamline payments, know about upcoming actions and do API integration with ERPs, among other things.
The market size of the industry in India is worth $80 billion and has the potential to reach $100 billion.
The two also plan to take the product to South East Asian countries where they see a similar problem and market potential.
“Moving forward, we want to focus on creating a most efficient product for legal processes and our next big milestone will be to dominate the Indian market before moving to the South East Asian nations,” Bijapur said.