Portland startup Paxton AI secured $6 million from investors to get its platform into the hands of more customers.
The company built a generative AI assistant designed for legal and regulatory research. Attorneys and other professionals can query Paxton for summaries of laws and regulations, and the results include footnotes with citations.
“It’s important for our attorney users to validate and understand the response of the model,” said Mike Ulin, co-founder and chief technology officer. “When we give a response, it's footnoted and has citation to source material.”
It’s an important distinction for the startup compared with other models where results might not be transparent.
This round was led by WVV Capital. Significant investment also came from Kyper Knight and 25Madison. Additional investors also included AI Fund, Voyager Capital, Gaingels, Plug and Play Technology Center, Identity Ventures and Dick Parsons, the former chairman of Citi.
Voyager Partner Diane Fraiman said the company's regulatory compliance expertise helps simplify complicated tasks.
"Any markets driven by regulatory compliance but (especially) the ability to manage it and keep up with rule changes and enforcement is hard. The second part is if enterprises don’t keep up (with compliance), whether health care or financial markets, the costs are enormous,” she said. “Here is a platform that attacks both the complexity of keeping up with it and the massive amounts of data. Seemed like the perfect challenge for AI but also a great investment.”
Paxton’s assistant is built from the ground up and doesn’t rely on open platforms like ChatGPT. It provides answers based solely on the data within its system, which consists of more than 40 million documents and access to laws and regulations from the federal government and all 50 states, Ulin said.
The company released the first version of the product in July and already has hundreds of attorneys on the platform. The tool is currently available for free for users to test. The company is in talks with large organizations on enterprise pilots.
Paxton AI has a team of 10 workers and plans to hire as a result of this funding round. Ulin wants to build out his engineering team.
Ulin and co-founder and CEO Tanguy Chau met when they both worked at consulting practice McKinsey and Co. Ulin went on to work in legal tech and data science. Ulin co-founded insurance tech company Zesty.ai and helped grow that team to 70 before leaving. Chau went on to work in venture capital.
Ulin moved to Portland a year and a half ago and brought the company with him. While the team is dispersed, Ulin is happy to be based in Portland.
Chau's previous experience as a partner at two different Silicon Valley Funds helped raise this round, as he had a robust network of investors to leverage, Ulin said. However, basing the company in Portland also gave it access to Pacific Northwest investors like Voyager.
“You can build a great company anywhere now,” Ulin said. “There is a lot to like about Portland from the talent available from OSU and UO, the cost of living is compelling and it’s a nice place to live for nature and the food scene. Plus, the airport is great to get where you need to go.”
