Key Takeaways

  • SpotDraft secured an $8 million Series B extension from Qualcomm Ventures, lifting its valuation to roughly $380 million
  • The company is expanding on-device AI for contract review as privacy and data governance concerns slow cloud adoption
  • Regulated sectors such as legal, defense, and pharma are driving early demand for offline, device-resident AI models

Enterprises have been racing to experiment with generative AI tools, but the enthusiasm has often collided with a reality that CIOs and legal teams know all too well: sensitive documents rarely make it through internal security reviews if the workflow depends on cloud processing. That’s the backdrop against which SpotDraft has raised another $8 million from Qualcomm Ventures, a strategic extension of its Series B that nearly doubles the company’s valuation from last year to about $380 million.

The new capital is aimed squarely at expanding its on-device AI capabilities for contract review. It might seem like a niche use case, but contracts are the backbone of commercial activity—and one of the last categories companies are willing to run through cloud-based AI models. They contain privileged information, pricing details, IP, and all the terms that shape a business relationship. So the idea of keeping AI “close to the document,” as SpotDraft’s leadership puts it, has started to move from novelty to necessity.

Here’s the thing: performance gaps between on-device models and large cloud-based systems have shrunk faster than many expected. SpotDraft CTO Madhav Bhagat noted that some tuned on-device models now sit within 5% of frontier systems on evaluation metrics, and on newer chipsets, response speeds have improved enough to run contract analysis at roughly one-third the latency of cloud alternatives. Those numbers don’t make on-device AI universally better, of course, but they do make it viable for workflows that were previously too demanding.

At the Snapdragon Summit in 2025, SpotDraft demonstrated its VerifAI workflow running fully offline on laptops powered by Snapdragon X Elite chips. Review, risk scoring, redlining—the whole process stayed on the machine without sending data to the cloud. Only login, licensing, and collaboration features still needed connectivity. For lawyers accustomed to working in Microsoft Word and navigating rigid playbooks, the pitch is fairly straightforward. VerifAI applies those policies directly within the document, comparing clauses against guidelines and prior precedent.

Not every team will leap to on-device AI immediately. Old habits and legacy systems tend to slow things down. But demand from regulated verticals is creating momentum. Sectors like defense and pharmaceuticals often face strict data residency and confidentiality rules, making cloud-based AI tools non-starters for certain document sets. One question lingering in the background: how quickly will hardware adoption catch up? Many enterprises are still early in refreshing their fleets with AI-capable PCs.

SpotDraft’s growth trajectory indicates that customers are ready to test new architectures. Since early last year, its customer count has climbed from around 400 to more than 700. Contract volumes are up 173% year over year, surpassing one million processed annually, and monthly active users hover around 50,000. The company is projecting 100% revenue growth in 2026 after two consecutive years of triple-digit expansion, though it hasn’t disclosed specific revenue figures.

Some teams will see the on-device AI shift as a practical path forward rather than a wholesale reinvention of their tech stack. VerifAI runs inside the applications legal departments already rely on, and the ability to operate offline helps organizations that simply can’t expose certain contracts to external environments. Still, adoption will depend on rollout timing. SpotDraft is currently offering its on-device workflow only to selected customers, with broader availability expected as AI-ready hardware becomes commonplace.

The funding also marks a deeper technical and commercial alignment between SpotDraft and Qualcomm. Beyond the capital, the companies plan to collaborate on development and go-to-market efforts tied to on-device deployments. It’s a reminder that chipmakers have a growing role in shaping enterprise AI strategies, particularly where privacy and latency drive decision-making.

SpotDraft itself has grown into a globally distributed team of more than 300 employees. Most are based in Bengaluru, with smaller groups in the U.S. and UK. Since its founding in 2017, the startup has raised $92 million from investors including Vertex Growth Singapore, Trident Growth Partners, Xeed VC, Arkam Ventures, and Prosus Ventures.

Whether on-device AI becomes a standard approach in legal tech—or remains a specialized solution for high-sensitivity workflows—will depend on how quickly enterprises recalibrate their infrastructure and trust models. For now, the trend lines are clear enough. When privacy and compliance are non-negotiable, keeping AI local is becoming a much easier sell.