Spellbook secures $40-million from RBC to snap up smaller legal AI startups

Spellbook, a rapidly growing legal AI software company, has secured US$40-million in debt financing from Royal Bank of Canada (RBC) to acquire smaller competitors in the generative AI space. Founded in 2022, Spellbook offers an AI copilot powered by large language models like OpenAI’s GPT-5, assisting lawyers and corporations with contract drafting, editing, and review within Microsoft Word. The company has experienced significant growth, tripling its revenue in 2025 and projecting US$100-million in annual recurring revenue by year-end, serving over 4,000 customers globally.

Spellbook recently partnered with the Canadian Bar Association to provide AI-powered tools to its 40,000 members and plans to expand its team by 100 employees by the end of 2026. The financing from RBCx will be used to consolidate smaller, revenue-generating AI companies, primarily for their customer base and talent, rather than their products. Spellbook intends to pay below-average acquisition multiples, targeting companies seeking an exit.

RBCx views Spellbook as a strong investment due to its technology, growth, experienced management, and backing from prominent investors like Khosla Ventures and Thomson Reuters Ventures. The company was valued at US$350-million following a US$50-million venture capital financing last year and anticipates spending up to US$60-million on acquisitions over the next two years.

(Source：The Globe and Mail)