My take on Manifest raising $60m to be a law firm/ tech company…
The question is: How does a company take a $750m valuation and get to a venture-scale return?
At present, they’re maybe pulling $10m to $15m in services revenue with 100 lawyers on the platform. They have significant costs to advertising, acquiring customers, and tech development. At 3,000 cases handled, I’m guessing break-even to slightly profitable at best, probably underwater.
Before the announcement, I wasn’t aware there was a tech angle to the company, I thought it was just a group of lawyers running under shared advertising.
We know the angle isn’t selling tech to companies. They’ve correctly identified that lawyers are the worst tech purchasers on the planet. Props to them.
So if it’s services revenue that leads the way to an $8 billion valuation to make VCs happy / interested, they need 4-8 billion in services revenue at a 1-2x multiple.
(Maybe there is some hope of a 10-20x “tech” multiple, but when SAAS multiples are falling, the last thing I would expect is to see law firms multiples increasing)
The US immigration market is not that big ($~8-10bn), and the story being told can’t be that they will eat up the entire market. I’m guessing the pitch is:
“As we get bigger and acquire customers, our systems will get more efficient and drive up profitability per case. We can become an AI-native Big 3 law firm faster than Fragomen or BAL can make the switch, and we’ll eat their market through better outcomes and faster services.”
They are probably also looking sideways, outside immigration, at other verticals: contract law, incorporation, acquisitions mergers, etc
My mental model is currently a PE-style rollup of different attorneys/law firms, with some shared back office and tech that may make attorneys more efficient.
Love to see new models and tech being explored in the space, this will be interesting to watch.