750,000 divorces happen, on average, every year in the U.S.
While some call that a shame, others see it as a total addressable market. Take, for example, online divorce startup Hello Divorce. They have just raised $2 million to help couples streamline to the inevitable: splitting up. The company provides a combination of software and legal services that start at $99 and average at about $2,000.
The company's seed rounding of funding was "led by CEAS, with additional funds coming from Lightbank, Northwestern Mutual Future Ventures, Gaingels and a group of individuals including Clio CEO Jack Newton, WRG’s Lisa Stone and Equity ESQ led by Ed Diab," according to TechCrunch.
The total cost of divorce is, on average, between $8,400 and $17,500. The industry as a whole is valued around $50 billion per annum, the report notes.
The company was started in 2018 by family law attorney Erin Levine, who called billable hours for divorce an "antiquated process”. It currently is available in just four states: California, Colorado, Texas and Utah.
She told TechCrunch: “Right now, lawyers are the keeper of information, and clients keep paying until the divorce is done. Divorce is more than forms. It is a challenging time, and most people need or want support. I saw a big hole there to use technology and fixed fees to put couples in the driver’s seat and take down that level of conflict.”
The company says that most people spend 2 to 5 years thinking about divorce and that 80% of them won't have access to counsel.
The company's plan is to use the funding for "rapidly scaling legal filing options across the U.S., improving its ground-breaking product, and giving consumers more of the content and services". It is already operating at a profit and will use the cash to scale to places like New York and Florida.
Levine says the company had 2,000 inquiries into divorce over the last year, thanks to the pandemic forcing couples to actually stay in each others' company: “The inquiries increased about staying or going, and what divorce will look like. It will be awhile before we see the total effects of what divorce looks like following the pandemic.”
Lightbank’s Eric Ong concluded: “They are a combination of industry expertise and thinking outside of the box. Eighty percent of people are still not getting meaningful representation, and we looked for technology that would provide a customer value proposition and we didn’t find one until Hello Divorce.”
July 31, 2021 10:30 pm