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Legaltech startup Darrow secured $35 million in Series B funding led by Y Combinator to enhance its AI platform despite recent layoffs.

PRIVATEJul 07, 2026•about 1 month ago

Amount Raised

$35 Million

Round Type

Series B

New YorkArtificial IntelligenceMachine LearningLegalLegal Tech

Investors

AlephNfxEntrée CapitalY Combinator

Description

Darrow raised $35 million in a Series B funding round to support its AI platform for legal violations. Despite being profitable for three years, the company announced layoffs affecting one-third of its workforce. Investors include Y Combinator, Entrée Capital, NFX, and Aleph. The funds will help Darrow adapt to market changes and continue its growth.

Company Information

Company

Darrow

Location

New York, New York, United States

About

Darrow is an AI-powered LegalTech company founded in 2020, on a mission to fuel law firm growth and deliver justice for victims of class and mass action lawsuits. Their Justice Intelligence Platform leverages generative AI and world-class legal experts and technologists to uncover egregious violations across legal domains spanning privacy and data breach, consumer protection, securities and financial fraud, environment, and employment.

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Funding Insights

Based on industry data

Timeline to next round

Series B companies typically work for 15-20 months before raising new capital

Growth expectations

Series B companies are expected to scale rapidly and expand market reach

VC-backed spending patterns

VC-backed companies spend 89% more on sales and 100% more on marketing than bootstrapped peers

Tech investment trends

83% of B2B companies plan digital investments, with 79% prioritizing customer experience tech