Tech billionaire Mike Lynch: ‘You’re seeing the beginning of a new age’

Mike Lynch is making a bet on robot lawyers.

This Wednesday, the tech billionaire investor announced an investment in Luminance, a newly launched startup that uses artificial technology to read contracts in order help law firms with the arduous process of due diligence for mergers and acquisitions (M&A).

It's not a "sexy" piece of technology, Lynch argues — but one that has huge implications for the way we live our lives, and is indicative of a quiet revolution in artificial intelligence.

"It's like seeing a steam engine for the first time. What this is is probably an example of what's going to be changing a lot of things. If you can get machine technology to be reading contracts, it's going to be changing a lot of the world around us … you're seeing the beginning of a new age."

52-year-old Lynch is best known for starting Autonomy, an enterprise search engine sold to Hewlett-Packard in an $11 billion (£8.3 billion) deal that has left the British entrepreneur embroiled in ongoing lawsuits. He has since founded venture capital firm Invoke Capital — the vehicle through which the investment in Luminance was made.

This week, Business Insider sat down with the investor to discuss Luminance, Brexit, his augmented reality plans, and why he likes having an "unfair advantage."

Mike Lynch is an investor in Luminance — but was also instrumental in helping create it.

"The bit that makes it possible is the machine learning, and that was being done by some research people at Cambridge, and I actually have a connection because my PhD a long, long time ago was in machine learning," Lynch said. "I was introduced to them, and what they were doing looked great, but I said to them 'look, you gotta go and meet some real world people.'

"So they started getting real data and they met up with [law firm] Slaughter and May, and basically the machine learnt from Slaughter and May how to do these thing and at that point they made a little company. They got a CEO who is a lady who'd actually been involved in a lot of M&A deals over their career and we funded it, and it's been developing the product, and today it comes out into the bright lights of day."

Invoke is Luminace's sole investor, and invested a figure in the "low millions," Lynch said. The startup's valuation is not being disclosed. Its tech has already been used on live deals, and has a contract signed to help Slaughter and May. While the focus is — for now — on M&A analysis, the ultimate vision is more ambitious.

Is this the end of lawyers? (No.)
Some of the collection of robots and space toys, the majority of which are in superb condition and with original packaging, which will go under the hammer at Vectis Auctions on Tuesday March 15th.
A cutting edge legal team. Owen Humphreys / PA Wire/Press Association Images
Long-term, the plan is to apply Luminance's contract-reading technology in other use-cases. Analysing procurement deals for their relative value, or continually monitoring extant contracts to make sure they stay compliant with changes in the law are two examples Lynch gives.

"This is a generic technology, that's really the big story today. If you think of how much of the world is out there handling contracts at the moment, reading them, negotiating them … these are technologies that will automate and support all those tasks in the future. So although not quite as sexy as driverless cars, it's likely to have a very big impact."

This is, Lynch said, "the beginning of a new age."

So is this the beginning of the end for the human legal profession? "No," he countered. "The thing about being a lawyer is you have all this education, and you do all this highly skilled stuff, and then you spend a lot of time doing the grunt work. What we're trying to do is make sure the lawyers are doing the clever bit, and that's what the the clients want."

"We like an unfair advantage."
rio dogs
A London venture capital investor shows off his portfolio companies. Pilar Olivares/Reuters
Luminance is an example of what the investor calls a "fundamental technology."

At Invoke, the "first thing we look for is fundamental technology. We like an unfair advantage. So don't bring us your great new social media shoe store. And the second thing is because we've done a lot of this in the past, is we're only interested in things that we think can be very big."

How big? "We look at businesses that we think can be billion-dollar-plus size."

Will Luminace hit that in five years? "We don't put a timescale on it, but hey — five years is a long time in our world. Someone once told me tech years should be in dog years."

Brexit: If we don't start to give those messages soon, I do think it could have some effect."
Theresa May
British Prime Minister Theresa May. Reuters
Lynch has also been involved in the political sphere, acting as a scientific advisor to former British leader David Cameron. He still holds the same role for new Prime Minister Theresa May, he told Business Insider, though he has yet to be called up to help her: "I suspect the Prime Minister is probably busy with some quite short term things right now," he said with a chuckle.

He was also vocal in the run-up to the referendum on Britain's membership of the European Union, calling Brexit "lunacy."

"I’ve sat in rooms where overseas organisations have made decisions about where they’re going to put a factory or whether they are going to invest in a R&D centre," he said in an interview with Leaders In."At the moment, they think about it should it be Holland, should it be Britain. It’s never going to be Britain if we’re outside the EU. They just will not do that."

Post-Brexit, he takes a more diplomatic tone — but clearly still has serious reservations. "I think it's going to present a significant number of short-to-medium-term challenges, and the outcome will be dependant on how we handle those."

Whether or not it affects how he does business depends on the exact terms of the UK's withdrawal from the EU. "For example, in tech we're probably less concerned about tariffs, because of the way how tech works. But we're very concerned at being able to get the best talent from around the world, so these are the kind of questions the government has to think about."

And will it threaten Britain's status as tech capital of Europe? "It all comes down to what decision is made. If we start to make noises that we welcome talent from wherever, be it the EU or the rest of the world … then I think we'll be fine. If we don't start to give those messages soon, I do think it could have some effect."