Onit Acquires McCarthyFinch to Integrate AI into Legal Workflows

Onit, a Houston-based company specializing in workflow software, revealed this week its acquisition of McCarthyFinch, a participant in the 2018 TechCrunch Disrupt Battlefield competition. Onit plans to integrate the acquired startup’s artificial intelligence capabilities to enhance its suite of legal workflow software solutions.

The financial details of the transaction were not disclosed by either company.

Following a comprehensive assessment of numerous companies in the field, Onit determined that McCarthyFinch was the best fit, providing the artificial intelligence functionality that was previously absent from its legal workflow software. According to Eric M. Elfman, CEO and co-founder of Onit, “We thoroughly investigated approximately a dozen companies operating in the AI sector, with an in-depth review of six. McCarthyFinch distinguished itself through its superior technology and highly skilled team,” as reported to TechCrunch.

The intention is to incorporate this AI technology into Onit’s current Aptitude workflow platform. Elfman further explained, “My initial enthusiasm for McCarthyFinch stemmed from my first discussion with their CEO, Nick Whitehouse. They positioned themselves as an AI platform, which perfectly aligned with our workflow automation platform, Aptitude, and our overall strategy.”

Nick Whitehouse, CEO and co-founder of McCarthyFinch, stated that the startup was weighing options between seeking additional funding and exploring a potential acquisition when Onit expressed its interest earlier this year. Initially, he favored a partnership but ultimately shifted his perspective.

“I was initially focused on establishing a partnership and was perhaps somewhat dismissive of acquisition possibilities. However, through further discussions, it became clear that an acquisition was the more sensible path forward,” Whitehouse explained.

Negotiations intensified in May, and the agreement was finalized the previous week. Despite Onit being located in Houston and McCarthyFinch in New Zealand, all discussions and meetings were conducted remotely via Zoom. The leadership teams of both companies have not yet met face-to-face. McCarthyFinch will maintain its current location, even after the conclusion of the pandemic, and Whitehouse anticipates traveling to Houston when it is safe to do so.

Whitehouse credits his experience with the Battlefield competition as being profoundly impactful. “The valuable insights and coaching we received through Battlefield have remained with me and will continue to influence my approach throughout my career,” he noted.

At the time of the acquisition, the company served 45 customers and employed 17 individuals. It had previously secured US$5 million in funding. Now, McCarthyFinch will operate as part of Onit, continuing its development and growth.