An AI business backed by the likes of Revolut co-founder Nik Storonsky is seeking a rescue buyer after its fundraising ambitions fell short, City AM can reveal.
London-based legal firm Robin AI has been put up for sale on an insolvency marketplace – meaning its future could be in doubt if a buyer is not found, putting nearly 200 jobs at risk.
The move follows reports last week that the firm cut a third of its staff after it was unable to close a $50m (£38m) funding round.
Robin AI declined to comment. The company is understood to be exploring options for its future, including holding discussions with a number of potential suitors.
Founded in 2019, Robin AI went through a period of rapid growth as tech investors rushed to pour cash into artificial intelligence startups, with the legal sector seen as prime territory.
The company, which counts PwC, KPMG and UBS among its customers, raised more than $50m across two separate funding rounds in 2024, courting a list of high-profile investors including Storonsky, Monzo founder Tom Blomfield and Ian Hogarth, chair of the UK’s AI Security Institute.
But the firm, which has around 170 staff, has yet to turn a profit, posting losses of £12m in its latest accounts. It is understood to be generating revenues of around £8m annually with a pipeline of work worth £12m.
AI Bubble fears
The sale comes amid growing concern over an AI market bubble after an extended period of ballooning valuations.
Earlier this month the IMF warned that a boom in investment into AI businesses could trigger a market downturn on the scale of the dot-com bust of the early 2000s, with market concentration risk posed by the dominance of a handful of major AI businesses.
Lale Akoner, global market strategist at eToro, said: “Extreme market gains suggest the AI boom has moved beyond early discovery and into a phase of pricing perfection. This kind of psychology, where investors prize the story over the price, has marked every major rise and crash, from dot-coms to housing.
“Bull markets often mask poor execution; even companies that aren’t performing can find a bullish narrative to ride, hiding away from scrutiny.
“Still, even great companies can disappoint when expectations become too perfect, assuming endless growth, no new competitors, and flawless execution. If sentiment turns, an AI-led correction wouldn’t end the technological revolution; it would simply reset valuations closer to sustainable levels.”
Legal AI hopes
Robin AI is one of a handful of London-based AI startups that have sprung up over the past decade amid investor enthusiasm for technology that automates time-consuming legal processes for businesses.
That includes Luminance, backed by the late Mike Lynch, which raised $75m earlier this year, and ContractPodAI, which raised $115m in 2021.
Robin AI, which also has offices in New York and Singapore, says it combines the capabilities of in-house legal professionals with its own AI platform to handle legal document review, in order to reduce workload and resource strain on clients’ internal legal teams.
The company’s co-founder, James Clough, quit as chief technology officer in November last year. His successor has already since departed the business.