Like many early adopters, Benjamin Alarie was working with artificial intelligence well before it hit the mainstream. A business law professor at the University of Toronto, he founded the legal tech startup Blue J in 2015 with hopes of applying predictive AI to tax law.
But only a few years later, generative artificial intelligence—the segment of AI best exemplified by ChatGPT, Claude and other text-generating chatbots—was finally taking off. Users were buying in, private capital was flowing and what had once been a powerful but unflashy software segment was suddenly the center of a consumer-facing boom.
By then, Alarie told VentureBeat in a recent profile, Blue J had hit a ceiling, with revenue leveling off at around $2 million a year. So he made a high-stakes gamble and went all-in on the emerging genAI trend.
“Large language models seemed like a very promising direction,” Alarie says of his pivot. Blue J’s earlier tech, predictive machine learning, couldn’t answer every question users asked of it—“Which was really the holy grail,” the Blue J chief executive explains—leading customers to abandon the tool when it let them down.
Says Alarie: “I had this conviction that if we continued down that path, we weren’t going to be able to address our number one limitation.”
Yet the generative AI boom offered a way out. After giving his team six months to get him a new product, and then honing the resulting system’s outputs over the last few years, Alarie says that by now he’s cut Blue J’s response time down from a minute and a half to just seconds, and more than quadrupled its net promoter score from 20 to over 80.
He also credits a partnership with software giant OpenAI, which gives Blue J early access to cutting-edge artificial intelligence models in exchange for real-world feedback.
It’s all paid off for the company. VentureBeat reports that Blue J’s $122 million Series D, announced this summer, secured the legal tech startup a valuation over $300 million. More than 3,500 different organizations are reportedly on the firm’s client list, including several Fortune 500 companies.
“What once took tax professionals 15 hours of manual research to do can now be completed in about 15 seconds,” Alarie told VentureBeat. “That value proposition—we can take hours of work and turn it into seconds of work—that is driving a lot of this.”
Brian Contreras
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