DIY platform “Hi there Divorce” raises $ 2 million to drive nationwide enlargement
Hello Divorce, a California startup whose platform enables low-cost do-it-yourself and legal-assisted divorces, has raised an initial $ 2 million investment to drive expansion into all 50 states.
The investment was led by CEAS Investments, a single family office specializing in long-term investments in disruptive technologies.
Other investors included Jack Newton, co-founder and CEO of the Clio law firm; Light bench; Northwestern Mutual Future Ventures; Gaingels, a network of LGBT investors; Lisa Stone, executive director of WestRiver Group and former founder and CEO of BlogHer; and EquityESQ, led by San Diego attorney and investor Ed Diab.
This is the first time the company has raised outside funding, founder and CEO Erin Levine told me in a recent interview. She accelerated the development of the original platform and was able to fund its early growth and development from the company’s own revenues.
Founder Erin Levine
“That put us in a unique position in the seed round as we were already profitable and generating income,” said Levine. “We already grew into a pretty good clip.”
Levine, a divorce attorney based in Emeryville, California, founded Hello Divorce in 2017 as part of her law firm and spun it off as a do-it-yourself divorce platform in 2018.
The site has won multiple legal industry awards including the American Bar Association’s 2020 James I. Keane Memorial Award for excellence in eLawyering and Clio’s 2019 Reisman Award for legal innovation.
Last August, Levine announced plans to expand Hello Divorce from California to all 50 states. (See my LawNext interview with Levine and my blog post on the extension.)
To date, Hello Divorce has expanded into three states, Colorado, Texas, and Utah. The company says this new investment will help accelerate its expansion into more states, starting with New York and Florida in the near future.
The goal is to serve 12 states within two years, which will cover approximately 75% of all U.S. divorces per year.
Offers additional services
Levine told me that her plans to expand the platform are to provide those going through a divorce with more complementary content and services that they need to feel informed and in control of their divorces.
An important part of this is financial literacy, Levine said, as a divorcing spouse may need to switch insurance carriers or plans, split retirement benefits, or manage newly liquid assets.
Hello Divorce will partner with one of its new investors, Northwestern Mutual, to provide this type of financial services through the platform in addition to the legal services already provided.
The expansion also includes the development of a new platform, already underway, that will support the company’s ability to provide these different types of services. In certain states, the new platform will also be available in English and Spanish.
“Of course it’s a balance,” Levine said. “We want to be a single federal state and that as quickly and efficiently as possible, but we also want to think about expansion and penetrate into the federal states that are currently in the greatest need.”
Dual business structure
One of the challenges Hello Divorce is facing as it expands beyond California is making sure it complies with state regulations that govern legal practice.
The company operates on a dual entity model where the form generating software and platform is a standalone technology company and all access to direct legal services is provided through the Levine law firm.
When a consumer purchases a Hello Divorce membership with legal advice, the consumer signs two separate agreements, one with the technology company and one with the law firm. If the law firm then investigates a conflict and determines a conflict, the consumer’s fee will be refunded.
Integration of machine learning
In the longer term, Levine hopes to apply machine learning to the data collected through the platform to help consumers make smarter decisions about their divorce.
“Sometimes you just have to know what the other 5,000, 10,000, 15,000 people who used the platform were doing in similar or the same situations,” she said. “That can be easily solved with machine learning.”
Examples of decisions that machine learning could help with include whether to buy up your spouse’s portion of the house and then keep or sell it, or whether to use more for child or spouse support.
“Never before have we had this amount of data where I have people from all over the world telling us how many children they have, what their priorities are, what their parenting schedule will be, how much money they have to share “Said Levine.
“So we have this great data. We also know where the points of friction lie, where people fall out of the system and need human help. “
This data also helps Hello Divorce identify users’ problems and concerns based on the stage of their divorce and tailor information and services to that person.
Some of this machine learning will be built into the platform within 12 to 18 months, Levine said.
“That’s one of our goals before a Serie A, to be in 10-12 states, to expand the divorce ecosystem beyond the law, and to build our next-level platform that incorporates machine learning in some way.”
The hardest part of building Hello Divorce, Levine said, wasn’t the technological or regulatory constraints, but the courts, and especially the difficulty of navigating and integrating the various requirements and shapes of state, district and local courts.
“From a consumer perspective, it probably feels – or I hope it feels – pretty seamless,” Levine said. “But in the backend there are simply certain things that we cannot and will not automate for a very long time, if at all.”