General IPO
June 8, 2021
5 minutes read

Markets: Legal-Tech Startup LegalZoom Refiles For IPO

LegalZoom, a foremost legal-tech startup, has sought to hit the public markets again with an initial public offering. This is…

LegalZoom, a foremost legal-tech startup, has sought to hit the public markets again with an initial public offering. This is the second time it’s doing so after it previously filed for an IPO back in 2012 but withdrew its filing two years later.

Now, nearly a decade after its first attempt, the company has filed an S-1 document for an IPO with the US SEC. It’ll list on the Nasdaq stock exchange.

LegalZoom is a platform that helps its customers create legal documents without having to hire lawyers at significant costs. Basically, the company provides templates for legal documents that its users can then tweak to their own legal use cases.

As its business model, LegalZoom charges customers on different tiers for access to a library of legal documents for specific cases. It’s a solid business model on that end.

As usual, we’ll break down important bits from a company’s S-1 filing, mostly on revenue figures. In this case, as LegalZoom has filed an S-1 before, we’ll compare revenue figures from its current S-1 filing to that in 2012 to see how far the company has come since that time.

Revenue

LegalZoom had $471mn in revenue and a net income of $10mn in 2020. Compared to 2011, the last year before its previous filing, the company reported $156mn in revenue and a net income of $12mn.

So, in a nine-year span, LegalZoom’s revenue tripled while its annual profit stayed at similar levels.

Highlights

LegalZoom was founded in 2000. It’s come a long way from a company focused on the legalities of intellectual property now to a lot of areas including business formations, wills, and living trusts.

LegalZoom is largely owned by two private equity firms, Francisco Partners and GPI Capital. These two firms invested $500mn in LegalZoom in 2018. Before that, European private equity firm Permira had invested $200mn in the company for a stake of nearly 50%.