Austin-based legal technology company Disco on Wednesday became the latest Austin company to go public, and saw its shares surge on its first day on Wall Street.
Disco’s stock debuted at $32 per share on the New York Stock Exchange, trading under the ticker “LAW”. The share price rose quickly, jumping more than 32%, or $10.50, to stand at $42.05 shortly before 1 p.m. Wednesday.
The legal tech firm’s initial public offering called for selling 7 million shares at $32, with the offering’s underwriters given an option to purchase an additional 500,000 shares. If all options are exercises, the IPO could be worth more than $240 million.
Disco makes an artificial intelligence-powered platform to assist law firms and companies’ legal teams. CEO Kiwi Camara founded Disco in Houston in 2013and moved its headquarters to Austin in 2018.
The company twice revised its expected stock pricing prior to opening. Last week it estimated the shares would be priced between $26 and $29 per share, and earlier this week, the company estimated it would be between $30 and $31.
Disco’s flagship electronic discovery software helps lawyers gather evidence without the use of third-party technology or services. It also has software designed to help with case management, compliance, legal document review, disputes, investigations and data collection, all targeted for legal teams and government agencies.
In the company’s securities filing, Camara said Disco’s technology will help free up lawyers to focus on higher-priority tasks by automating the parts of their practices that don’t require human legal judgment.
“Our mission at Disco is to use technology to strengthen the rule of law. Technology will transform the law just as it has transformed every other area of life,” Camara said. “This transformation creates a massive opportunity to build an iconic business: the category definer for the new category of legaltech.”
As of late March, the company had 336 full-time employees and more than 900 customers, according to the company’s securities filings.
The securities filings also showed Disco’s revenue has been growing. In 2019, Disco had revenue of $48.6 million and reported a net loss of $29.8 million. In 2020, its revenue grew to $68.4 million, with a net loss of $22.9 million. In the first few months of 2021 the company had revenue of $21.1 million, with a net loss of $11.2 million, compared to $15.7 million with a net loss of $2.9 million in the same period the year before.
Prior to going public, the company raised $161 million, including a $60 million round it raised last year. Investors hold a significant stake of the company, securities filings show. Bessemer Venture Partners owns 26.4%, Austin-based LiveOak Ventures owns 19.2% and Geogrian Partners owns 12% of the company.
Disco joins a number of Austin companies that have gone public in recent years including Bumble, which went public in February and raised $2.5 billion, the biggest IPO in Austin history.
Earlier this week, Fitness franchise F45 Training, which recently moved its headquarters to Austin, closed its IPO after raising $25 million after selling 1.562 million shares of stock at $16 per share.