Paris-based startup Formality has raised €8 million in a funding round to advance its AI-powered contract management platform for clients and suppliers. The investment, led by venture capital firms Partech and Serena, was boosted further by an additional €2.4 million from BPI, the Bank of Public Investment, underscoring the industry’s confidence in Formality’s innovative approach.
Formality has already established a client base that includes Electra, Resilience, and Lifen. The company plans to utilise this funding to expand its sales team, accelerate technology development, and prepare for its planned entry into the American market in 2025.
A team of “repeat entrepreneurs”
Once ignited, entrepreneurship becomes an unstoppable force — a principle that perfectly aligns with the founding team of Formality. The startup’s co-founders embrace the spirit of “repeat entrepreneurs,” having previously created TVTY, a startup that specialises in measuring TV advertisement impact, sold to Nielsen (USA) in 2021. This experience likely contributed to investor confidence in Formality’s potential.
The team addresses a significant business challenge with Formality: managing client and supplier contracts. This complex task is crucial to a company’s financial health. Research indicates that ineffective client contract management can result in revenue losses of up to 9%, while approximately 60% of supplier contracts are automatically renewed without review.
How exactly does Formality tackle the contract issue?
Formality’s platform aims to streamline contract management through automation, centralisation of key documents, and real-time deadline tracking. The solution is designed for businesses with 50 to 1000 full-time employees across various sectors, including healthcare, real estate, finance, SaaS, and energy.
Speaking to TFN, Eliott Reilhac, Formality’s CEO, shared, “Formality puts AI at the platform’s core to eliminate clicks and save time, whereas many solutions are more manual. For instance, a salesperson could go to Slack and ask Formality, “I need a contract with Client Y for $20K per year, which will be renewed automatically every year.” She would then receive the contract ready for signature, based on a template validated by the legal team.”
The platform utilises advanced AI technology, including Large Language Models such as OpenAI and Gemini, adapted for legal workflows to enhance efficiency. “We are convinced that Formality is going to transform the way companies manage their contracts, bringing efficiency, security, and simplicity to a process that is still too often complex and manual,” concluded Reilhac.
Investors view’
The investment from Partech and Serena, both known for supporting high-potential tech startups, signals strong confidence in Formality’s vision and potential.
“Given our experience with the team when leading TVTY, it quickly seemed natural for us to invest in Formality,” says Sébastien Le Roy, Partner at Serena. “For us, they are the team best suited to tackle this major priority for companies today: administrative burdens. Their ambition, combined with their ability to attract the best talent, positions them to become a technological champion.”
“For many medium sized companies, contract management is not only time consuming and repetitive but can also be costly when poorly managed. Formality addresses a crucial market need, by allowing these companies to focus on their core business,” comments Phillippe Collombel, General Partner at Partech. “We are convinced that thanks to its SaaS product and unique features, Formality has the potential to establish itself as a market leader
Future outlook
While Formality’s €8 million funding provides a solid foundation for growth, its success will depend on how effectively it navigates these challenges. Its ability to deliver measurable efficiency gains and cost savings to clients while continuously innovating to stay ahead of competitors will be crucial in determining its long-term viability in the contract management industry.
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