This week, Berlin-based legal tech startup Xayn (soon to be Noxtua SE), developer of Europe's first sovereign Legal AI Noxtua, completed its Series B investment round of approximately € 80.7 million, with C.H. Beck, Germany's leading legal publisher, as the leading investor.
Additional new investors on board include Northern Data, a specialist in High-Performance Computing (HPC), Germany's largest business law firm CMS, Xayn's long-standing partner and co-initiator of the Legal AI Noxtua, and global law firm Dentons.
I spoke with Xayn CEO and co-founder Dr Leif-Nissen Lundbæk and Dr Oliver Hofmann, Head of Legal Tech at CMS, to learn more.
Europe's first sovereign legal AI platform
Xayn has developed Europe's first sovereign legal AI platform, specifically tailored for the German and European legal systems. Designed to meet the stringent privacy, compliance, and professional secrecy standards of the legal profession, Noxtua offers a suite of AI-powered tools to assist legal professionals in their daily work.
Born out of research at the University of Oxford and Imperial College London, Xayn's foundation lies in reinforcement learning, which it still uses to improve performance. today
While it didn't begin with language models, it became clear early on that they would be essential. Noxtua combines reinforcement learning with transformer and recurrent neural networks to optimise both performance and energy efficiency—its models can reduce energy consumption by up to 98% compared to alternatives.
The Xayn team connected with Dr Markus Kaulartz from CMS, one of Europe's largest law firms. His insights on privacy law and IP rights highlighted how existing legal AI tools, particularly those from the US, couldn't be used in European legal settings. They realised a real need for a compliant, powerful AI tool built for Europe.
The importance of privacy-first data sovereignty
Compliance, privacy, and data protection regulations deeply affect the legal industry — especially in Europe.
In Germany, law firms must comply with the Professional Secrecy Act, which restricts the use of cloud-based tools like ChatGPT. You'd need client permission to process their data using these platforms—something that's rarely feasible. That's why many firms traditionally have relied on on-premise software – up until now.
Xayn's sovereign European Legal AI adheres to the high professional, criminal, and data protection law requirements for attorneys (e.g. Section 203 of the German Criminal Code (StGB), Section 43e of the German Federal Code for Lawyers (BRAO)), enabling its use by professionals bound by confidentiality without requiring anonymisation.
Noxtua is trained on legal data — not client data — but on contracts and clauses designed specifically for this purpose. That makes it both compliant and accurate.
Data sovereignty is at the core of Xayn's identity. Dr Lundbæk asserts that the company has always believed in a privacy-first, European-centric approach to AI—bringing the algorithm to the data, not the other way around.
"This means designing systems that are data-efficient, respect privacy, and support sovereignty.
We've had many conversations with US investors and partners who simply don't understand why it matters. But for Europeans, it's critical — especially given our dependence on foreign technologies.
From a legal AI perspective, the challenge is clear: the US legal market is relatively uniform, making it easier to scale tools like Harvey. In Europe, however, we deal with fragmented, complex systems. US-centric tools aren't suitable for German, French, or Italian legal systems. We're building specifically for that complexity."
Xayn serves two main customer types: law firms and in-house legal departments, including compliance and procurement teams. Law firms have greater complexity, broader topics, and tighter regulations, especially around professional secrecy.
Noxtua Legal AI evolves with 55 mllion Beck documents
Xayn is currently building the third generation of Noxtua, leveraging C.H.Beck's exclusive legal data for training and further optimising of the Noxtua Legal AI.
Previously, Noxtua trained its model mainly using law firm data, which allowed for good clause comparisons but lacked deep interpretability.
With Beck data, the model can now explain and justify recommendations with proper references. This blend of drafting and research makes the system more accurate and trustworthy.
Publishing more than 9,000 available works, 80 specialist journals, and up to 1,000 new publications and new editions every year, the specialised publisher has by far the largest legal database in the German-speaking world with beck-online – with well over 55 million documents covering all relevant areas of law. beck-online contains, among other things, the most comprehensive collection of relevant commentary literature, which is essential for lawyers in their daily work.
According to Dr Lundbæk:
"This increase in data allows us to massively enhance the model's capabilities. It's not just a minor update, it's a significant evolution of the product."
According to CMS partner, Dr Hofmann, in civil law countries like Germany, literature such as commentaries and academic articles play a central role alongside statutes and case law. Lawyers and judges consult these sources to interpret law and make decisions.
"When a client sends a request, a lawyer must first understand the context, analyse the documents, and reference relevant case law and literature to provide advice or draft documents. Judges do the same when forming legal decisions.
That's why this partnership between Noxtua and Beck is powerful. Noxtua provides the AI and software capabilities, and we bring the legal data — both for training the model and supporting references. Unlike other tools like ChatGPT, our system can show the exact page from a commentary or case law that supports a response."
Xayn updates its model roughly every three months, which includes new functionalities and improved reasoning, ensuring that the latest documents and rulings are integrated.
Xayn expands Noxtua’s reach as public sector adoption accelerates
And from the get-go Xayn has attracted interest in Germany from a sector of legal professionals that have lacked the ability to access the AI-embedded tools of their global peers.
Dr Lundbæk shared:
"When we Xayn announced Noxtua publicly, it was overwhelmed by the interest. It clearly filled a massive gap. Law firms and legal departments are under pressure from growing regulations and shrinking headcounts—they need solutions like Noxtua to stay ahead."
Xayn has expanded its user base to encompass large law firms like CMS to enterprises and government departments. Law is everywhere — in contracts, regulations, bureaucratic forms. Public sector interest, in particular, has grown rapidly due to regulatory pressure.
Dr Lundbæk contends that governments are moving faster than expected, especially in Europe:
"Our focus on security, compliance, and sovereignty — supported by partnerships with Deutsche Telekom and Northern Data — aligns well with public sector needs."
Noxtua includes contract review templates — developed in collaboration with firms like CMS — that help guide users through legal workflows. These prebuilt workflows are designed to support even less tech-savvy users, enabling smooth and effective adoption.
Upcoming features include matrix review, which allows for bulk contract analysis, and multi-step templates — sometimes referred to as agentic behavior — that automate entire legal workflows such as contract review, redlining, and email generation.
The team is also expanding integrations, including with Power Automate. One example is ENBW, a German energy provider, which uses the platform to automatically detect incoming contracts, apply checklists, generate redlines, and notify legal teams — all without manual intervention.
This approach goes well beyond simple chat interfaces. It embeds AI directly into real legal processes, with a focus on transparency, depth, and alignment with organisational needs.
The current geopolitical shifts lend additional weight to this investment in sovereign European technology – above all in AI: in addition to high-quality data, Europe needs its own AI models and an autonomous infrastructure for more digital sovereignty and in order to avoid or reduce technological dependencies.
This is where the strategic investor Northern Data, based in Frankfurt am Main, brings extensive expertise in sovereign, European high-performance computing and hosting.
Aroosh Thillainathan, Founder and CEO of Northern Data Group, commented:
"We empower the world's most innovative companies – not just through our technology, but also by fostering the ecosystems that spark groundbreaking ideas.
Xayn/Noxtua successfully combines cutting-edge AI applications, fine-tuned LLMs, proprietary databases, and powerful compute resources—all within our sovereign, legally compliant AI infrastructure."
Previous investors Global Brain Corporation, KDDI Open Innovation Fund, CMS, and Dominik Schiener remain invested in the startup. The latter, along with C.H. Beck, takes over the shares of former investor Earlybird VC in alignment with the AI startup's new strategic orientation.
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