Birmingham-based Lexverify, an AI-powered risk management assistant, has raised £900,000 in seed round funding. The investment was led by Midven, part of the Future Planet Capital Group. £550,000 is from the Midlands Engine Investment Fund (MEIF 1) through the MEIF West Midlands Equity Fund, alongside £350,000 from Raspberry Ventures, The LegalTech Fund, and angel investors, including Richard Yorke, Mark Watkin Jones, Jonathan Scudder, Richard Grethe, and Karl Wyborn.

Lexverify’s AI-powered assistant helps prevent legal, compliance, and cyber risks on electronic communications in real time, providing continuous development support to employees. Aiming to help organisations achieve proactive compliance at scale through AI-powered real-time risk prevention, Lexverify uses natural language processing (NLP) to make risk prevention on electronic communications as easy as spell checking. Lexverify solves distinct problems for a client’s legal, compliance, HR, and cyber teams by scanning electronic communications to detect potential risks in areas such as competition law, financial sanctions, and GDPR, before they are sent, minimising exposure and providing continuous training to employees. Lexverify’s vision is to create a world where electronic communication is an asset, not a liability. The investment will enable the company to make the key hires it needs to fulfil its expansion plans, following successful pilots with enterprises in the financial services and pharmaceutical sectors.

The use of electronic communication in business has become an integral part of our work routine, and it has undoubtedly transformed the way we operate, making it more efficient and convenient. However, with this convenience comes the need for responsibility, as non-compliant messaging can pose potential liabilities. The average office worker sends around 10,000 emails per year. Just one misstep in communication can land both the individual and the company in trouble. This risk isn’t exclusive to emails; it applies to various forms of digital communication. In today’s digital work environment, ongoing training and continuous employee development support should be considered the new standard.

Studies suggest that companies are not taking enough measures to prevent real time outbound risk. 85% of organisations using Microsoft 365 have suffered outbound email data breaches, showing that Microsoft 365 security is not sufficient on its own. Outbound email mistakes cost businesses the most, resulting in customer and employee churn, financial losses, and reputational damage. However, there is not a strong outbound solution within the market, a gap Lexverify aims to fix.

Midven has monitored the success of the company since 2021 when they referred it to the National Cybersecurity Centre’s ‘NCSC For Startups’ programme, which is delivered by Plexal, the innovation company solving society’s challenges through collaboration with government, startups and industry. More recently Midven has provided strategic guidance to Lexverify to improve the business’ investment readiness, culminating in the latest investment round.

Cristian Gherhes, Founder & CEO of Lexverify says “Today, reactive measures fall short, and with Midven’s support, we’re not just adapting; we’re pioneering. Their referral to the NCSC for Startups was the spark, and this £900,000 investment is the fuel for our next chapter. We’re not just securing businesses; we’re revolutionising risk & compliance and cyber security in the digital landscape, helping organisations to achieve proactive compliance at scale.”

Huw Sparkes, Investment Manager at Midven says “Lexverify offers cutting-edge technology to proactively scan electronic communications in real time, and in doing so sets a new standard for risk management, employee training, and productivity growth. We are thrilled to support them on their journey to modernise the way businesses manage risk and foster a safer, more efficient, and professional workplace environment.”

Mark Wilcockson, Senior Investment Manager at the British Business Bank, said: “The Midlands Engine Investment Fund has invested in innovative SMEs in the Midlands since its launch in 2017. This investment from the MEIF 1 in Lexverify will allow the business to grow, expand its team and help create new guidelines in cyber security for businesses reliant on electronic communications. MEIF 1 supports small businesses that are innovative while positively impacting the local economy and we urge SMEs that are looking for funding to approach us.”

The Midlands Engine Investment Fund is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.

Saj Huq, CCO and Head of Innovation at Plexal, says: “Lexverify is a prime example of a business that’s developed something truly novel and this investment is validation of a market need. From his involvement in our NCSC For Startups programme with the National Cyber Security Centre to participating in our Cyber Runway accelerator with the Department for Science, Innovation and Technology, we’re proud to have Cristian within the Plexal ecosystem and look forward to witnessing his ongoing journey with Lexverify.”

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About Lexverify

Lexverify was founded in December 2020 by Dr Cristian Gherhes after identifying a key problem: while electronic communications have completely transformed the way we work, the use of electronic communications by employees exposes them and their organisations to a series of risks that can result in litigation and cause significant reputational damage and financial loss. This problem is particularly acute for companies operating in regulated environments, and is evident in the myriad of news articles on corporate legal and regulatory breaches, as well as fines imposed by regulators.

Lexverify’s mission is to make risk prevention on electronic communications as easy as spell checking, which can make the job of both employees and Legal and Risk & Compliance teams easier and more effective. Their AI-powered assistant uses advanced Natural Language Processing (NLP) to help prevent a range of legal, compliance, and cyber risks in real time. Its admin portal is a centralised hub that gives legal and risk and compliance teams real-time visibility into their organisation’s compliance posture.

Lexverify are NCSC for Startups alumni, and are currently part of the Cyber Runway Scale, Cyber Bridge, and Lawtech Bridge 2023 cohorts, as well as NVIDIA’s Inception Program.

About Midven

For more than 25 years, leading Birmingham-based venture capital firm Midven has been supporting Midlands SMEs, investing more than £90m into the region and raising over £200m co-investment into its portfolio. Midven’s ‘more than money’ approach helps to build strong and successful companies and support businesses every step of the way. Midven was acquired by Future Planet Capital in April 2021. For more information about Midven, please visit www.midven.co.uk.

About Future Planet Capital

Future Planet Capital Limited is a global venture capital and impact investor, connecting the world’s largest investors to the best minds in order to address global challenges. The firm is focused on providing growth capital to leading entrepreneurs and businesses from the world’s top universities and has deployed over $100M on behalf of institutional investors to date. Future Planet Capital’s goal is to profitably solve the world’s greatest challenges in climate change, education, health, sustainable growth & security. For more information about Future Planet please visit www.futureplanetcapital.com.

About the Midlands Engine Investment Fund (MEIF 1)

The Midlands Engine Investment Fund will invest in Debt Finance, Small Business Loans, Proof-of-Concept and Equity Finance funds, ranging from £25,000 to £2m, specifically to help small and medium sized businesses secure the funding they need for growth and development.

The Midlands Engine Investment Fund is operated by British Business Financial

Services Limited, wholly owned by British Business Bank, the UK’s national economic development bank. Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively, enabling those businesses to prosper, grow and build UK economic activity.

The Midlands Engine Investment Fund is supported by the European Regional

Development Fund, the European Investment Bank, the Department for

Business, Energy and Industrial Strategy and British Business Finance Limited, a British Business Bank group company.

The MEIF covers the following LEP areas: Black Country, Coventry & Warwickshire, Greater Birmingham & Solihull, Stoke-on-Trent and Staffordshire, The Marches, and Worcestershire in the West Midlands; and Derby, Derbyshire, Nottingham & Nottinghamshire (D2N2) Greater Lincolnshire, Leicester & Leicestershire, and South-East Midlands in the East and South-East Midlands.

The project is receiving up to £78,550,000 of funding from the England European

Regional Development Fund as part of the European Structural and Investment

Funds Growth Programme 2014-2020. The programme will continue to run until the

end of 2023.

The Ministry for Housing, Communities and Local Government is the Managing Authority for the European Regional Development Fund. Established by the European

Union, the European Regional Development Fund helps local areas stimulate their economic development by investing in projects which will support innovation,

businesses, create jobs and local community regenerations. For more information

visit www.gov.uk/european-growth-funding.

The European Investment Bank is providing £122,500,000 to support the Midlands Engine Investment Fund. This follows backing for the Northern Powerhouse in 2017 and backing for the newly launched North East Fund. For further information visit www.eib.org

The funds in which Midlands Engine Investment Fund invests are open to businesses with material operations in or planning to open material operations in the West Midlands and East & South-East Midlands.

The British Business Bank has published the Business Finance Guide (in partnership with the ICAEW, and a further 21 business and finance organisations). The guide, which impartially sets out the range finance options available to businesses and provides links to support available at a regional level, is available at https://thebusinessfinanceguide.co.uk

About the British Business Bank

The British Business Bank is the UK government’s economic development bank. Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively, enabling those businesses to prosper, grow and build UK economic activity. Its remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.

The British Business Bank’s core programmes support nearly £8bn of finance to almost 94,800 smaller businesses. Since March 2020, the British Business Bank has also launched four new Coronavirus business loan schemes, delivering almost £73bn of finance to around 1.6m businesses.

As well as increasing both supply and diversity of finance for UK smaller businesses through its programmes, the Bank works to raise awareness of the finance options available to smaller businesses. The British Business Bank Finance Hub provides independent and impartial information to businesses about their finance options, featuring short films, expert guides, checklists and articles from finance providers to help make their application a success.

In light of the coronavirus pandemic and EU Exit, the Finance Hub has expanded, and it now targets a wider business audience. It continues to provide information and support for scale-up, high growth and potential high growth businesses, but now provides increased content, information, and products for businesses in survival and recovery mindsets. The Finance Hub has been redesigned and repositioned to reflect this, during this period of economic uncertainty.

British Business Bank plc is a public limited company registered in England and Wales, registration number 08616013, registered office at Steel City House, West Street, Sheffield, S1 2GQ. It is a development bank wholly owned by HM Government. British Business Bank plc and its subsidiaries are not banking institutions and do not operate as such. They are not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). A complete legal structure chart for the group can be found at www.british-business-bank.co.uk.