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Behind how the document automation startup Klarity works

“Although ‘full automation’ is still in its infancy, our solution is able to automate over 85% of documents with much higher accuracy when compared to existing solutions.”

Klarity is the world’s first AI-driven software that helps humans save time by reviewing repetitive documents. Founded in 2017 by an MIT engineer and a Harvard Law graduate, the company has raised USD 18 Million in a Series A funding round. Klarity has companies such as Okta, PagerDuty, Zendesk, Coupa, UiPath, etc., on its clientele.

Analytics India Magazine caught up with Aditya Thiruvengadam, founding engineer at Klarity, to know more about its product offerings and expansion plans.


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AIM: Why did you decide to build a startup around document review automation?

Aditya Thiruvengadam: The process of “document review” is the most soul-sucking job for many, but it is critically important for any organisation.

Every organisation relies on a painful, manual review process to gather mission-critical information from documents that directly influence different business departments such as order processing, billing, and revenue recognition – all these activities are extremely important and help businesses make better decisions.

We, at Klarity, have created an AI-driven technology that allows companies to automate this manual, painful part of the jobs for humans and allow them to focus on high-value work. The problem had existed since time immemorial, but no one had come up with an end-to-end solution, which led us to build a startup focused on document automation. As the founding engineer – my focus involved years of research and engineering to solve document automation using AI.

AIM: How does Klartity leverage AI to solve the problem statement of ‘automating document review’?

Aditya: As humans, we look at documents to understand the content contained inside. At the same time, we are also observing the structure, layout and styling of the document. All this helps us to piece together the context we need to comprehend the information presented in the document.

The AI system designed by Klarity works in a similar, multi-modal fashion. We use computer vision to understand the visual structure of the document and natural language processing, which uses this information to identify the semantic boundaries within the document.

We collaborate with expert accountants and lawyers – to constantly innovate with the current state-of-the-art architectures like BERT, GPT3, YOLO – and build custom AI that can understand complex legal documents like the human brain.

AIM: What challenges did you encounter while building your product?

Aditya: NLP, at the moment, has evolved to a point where it works perfectly well with plain and short blocks of text. The same holds true for computer vision, which delivers great results when the documents are fairly well-structured. Finance and accounting teams have to handle extremely complex documents – both from linguistic and structural standpoints. This was the major challenge we faced.

We have spent multiple years researching these fundamental challenges and perfected our AI system capable of handling complex real-world documents.

AIM: What kind of products/ services do you offer, and how do they integrate with existing environments deployed at enterprises?

Aditya:: Presently, accountants spend more than 30-40% of their work hours in organising, reading, and managing documents and spreadsheets with document summaries. They have to manually read Order Forms, Purchase Orders, and Master Agreements to extract information and validate transactions.

The software and AI developed by us completely eliminates the need for human review for more than 85% of documents, which, in turn, saves thousands of man-hours every year. Accountants need not spend their valuable time reviewing documents and can instead focus on complex, high-value accounting tasks. 

Our solution connects with existing systems like Salesforce, Ironclad – where documents are stored and automatically categorised into deals. The AI system automatically reviews each document, populates an accounting checklist and alerts human users about any documents that may have a non-standard term or an exception.

Our solution can also generate automatic summaries of the documents and deals reviewed and can push the data into our customer’s ERP system, such as Netsuite and SAP.

AIM: What makes your product stand out compared with existing products in the market?

Aditya:: All the existing products in the document review automation space focus on generic ‘partial automation’ or ‘workflow-based automation’ – both of which need a human user to review and lack scalability due to the limited value of the product.

We focused on ‘full automation’, one vertical at a time, solving real challenges associated with document review faced by our customers.

Although ‘full automation’ is still in its infancy, our solution is still able to achieve this over 85% of documents with much higher accuracy, when compared to existing solutions. This makes us unique and significantly more valuable than other products in the document review automation market.

AIM: What are your plans for growing Klarity?

Aditya: We are currently focusing on our first vertical – automating document review for finance and accounting teams to assist them with revenue accounting for SaaS/software companies in the US. However, every industry across the globe is struggling with automating document reviews.

The technology we have built is extremely generalisable and can be applied to future use cases like Vendor and Lease Agreements. We plan on expanding our scope, one step at a time, and hope to solve the problem revolving around document review automation across industries.

We plan on growing our team of data scientists and machine learning engineers in both San Francisco and Bangalore.

AIM: You recently released a demo that allows prospective customers to test the process by uploading and reviewing their own real documents. What was the inspiration behind this?

Aditya: Everyone who works in revenue accounting has this problem, but most don’t know it can be solved by technology today. The vast majority of people who seek a solution end up contracting the work out to outside accountants. That’s not really a solution, it’s just a problem paid forward and another massive bill. We want to let the world know that the technology is real and it exists!

I figured the best way to let people know there’s a better way was to show them. Our demo allows anyone with a web browser to process a document using our AI, instantaneously and for free on our website.

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SharathKumar Nair
Sharath is an ardent believer in the ‘Transhumanism’ movement. Anything and everything about technology excites him. At Analytics India Magazine, he writes about artificial intelligence, cybersecurity and the impact these emerging technologies have on day-to-day human lives. When not working on a story, he spends his time reading tech novels and watching sci-fi movies and series.

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