Divorce is messy and stressful, made even more messy and stressful when a couple are unable to go through the legal process because of the cost. Online divorce startup Hello Divorce is developing a platform to make this process more affordable and faster.
To do this, the Oakland, Calif., Based company on Thursday announced a $ 2 million funding round led by CEAS, with additional funds from Lightbank, Northwestern Mutual Future Ventures, Gaingels and a group of people including Clio CEO Jack Newton, Lisa Stone of WRG and Equity ESQ led by Ed Diab.
Statistics show that there are an average of 750,000 divorces in the United States each year, and the average total cost of divorce can cost between $ 8,400 and $ 17,500 depending on the state in which you live. Overall, some sources estimate the divorce industry at $ 50 billion per year.
Family lawyer Erin Levine founded the company in 2018 so divorcing couples could access “helpful and affordable legal advice” and resources beyond online forms. Levine told TechCrunch that the billable hours model for lawyers is “an outdated process” for consumers who want an easier and clearer divorce.
“Right now, lawyers are the keepers of information and clients continue to pay until the divorce is final,” she said. “Divorce is more than forms. It is a difficult time, and most people need or want support. I saw a big hole in it for using technology and fixed costs to put couples in charge and eliminate that level of conflict.
With this funding round, the company plans to rapidly expand legal deposit options across the United States, enhance its breakthrough product, and give consumers more of the content and services they need to feel informed. and in control of their divorce process.
Hello Divorce provides accessible legal software and services starting at $ 99 for a DIY option or up to $ 2,000 on average for legal help throughout the divorce process in a third of the time, and completely remotely .
Levine said most people spend between two and five years contemplating divorce, and during that time they’re afraid they won’t be able to afford it, and if they have children, they’re afraid of losing them. Of these people, 80% will not have access to a lawyer.
Although the business is already profitable, Levine has turned to venture capital to be able to build an infrastructure and leverage the advice that CEAS and other investors, like Eric Ong of Lightbank, are providing, by stating “it’s clear what I know and what I don’t know.”
Ong said he met Levine through co-investors in the round, who told him Hello Divorce was something he would resonate with. Lightbank invests in category-stage companies, and he was drawn to what Levine and his team were doing.
“They are a combination of industry expertise and thought outside the box,” he said. “80% of people still don’t get meaningful representation, and we looked for technology that would provide a customer value proposition and we couldn’t find one until Hello Divorce. “
The company plans to use the seed funding to expand legal deposit options across the United States, on product development and new content and services to educate people coming to the Hello Divorce website.
The service is already available in four states: California, Colorado, Texas and Utah. Levine said the choice of initial states was strategic: she is familiar with California law, while Colorado has a complex system for divorce. Texas doesn’t have a streamlined way for same-sex couples to divorce, which Levine said she wanted to tackle, and Utah has a new regulatory regime. Then it expands to New York and Florida, where it will launch in a bilingual format.
Since 2018, Hello Divorce has grown 100% year over year, with divorce success rates of 95% after starting the process on the platform. In the past year, the company has received 2,000 inquiries on how to shelter in someone’s house while considering divorce and co-parenting during the lockdown.
“There have been more inquiries about staying or leaving and what the divorce will look like,” Levine said. “It will be some time before we see the full effects of what post-pandemic divorce looks like. “