Swedish legaltech Legora has raised $550 million at a $5.55 billion valuation in a Series D round, the company announced on Tuesday, as investors pile money into European AI startups.

The round was led by Accel, with participation from existing investors Benchmark, Bessemer Venture Partners, General Catalyst, ICONIQ, Redpoint Ventures and Y Combinator.

New investors including Alkeon Capital, Bain Capital, Firstmark Capital, Menlo Ventures, Salesforce Ventures, Sands Capital and Starwood Capital were also involved.

Legora’s Series D is its third raise in the past year.

The announcement comes on the back of a bumper start to the week for European AI companies.

U.K.-based AI infrastructure Nscale said on Monday that it had raised a $2 billion Series C and on Tuesday former Meta AI chief Yann LeCun’s new AI startup Advanced Machine Intelligence Labs announced it had picked up over $1 billion. U.K. autonomous driving startup Wayve hit an $8.6 billion valuation in February after raising a $1.2 billion Series D.

Record funds were ploughed into European AI startups in 2025, with $21.7 billion invested, according to dealcounting platform Dealroom. Just over two months into 2026, AI startups in the region have raised more than $9 billion.

“Over the past year, the pace of adoption in the U.S. has exceeded our expectations, as leading firms and in-house teams move decisively from experimentation to embedding AI across their organisations,” Max Junestrand, CEO and cofounder of Legora, said in a statement.

“This funding enables us to accelerate our U.S. growth – investing in talent and infrastructure, strengthening our presence in key markets, and ensuring we can support customers on the ground as they integrate AI into their core workflows.”

Legora is expanding its footprint in the U.S. with new offices in Houston and Chicago, alongside its existing presence in New York and Denver. The company expects to open additional local hubs and grow to more than 300 employees across its U.S. offices by the end of 2026, it said.

Tesla is suing California’s Department of Motor Vehicles to reverse a ruling that found the automaker violated the law by falsely promoting its cars’ self-driving capabilities.

The suit comes two months after the state’s Office of Administrative Hearings determined that Tesla engaged in false advertising, and said the DMV could temporarily suspend the company’s licenses to manufacture or sell cars in the state.

The DMV instead asked Tesla to clean up its marketing language. By Feb. 17, the agency said Tesla had done so appropriately and no license suspension would be required.

But Tesla, which is banking much of its future on robotaxis, wants the DMV to go further. In their complaint, dated Feb. 13, attorneys for the automaker alleged that the agency “wrongfully and baselessly” labeled Tesla a “false advertiser” for its prior use of the terms “Autopilot” and “Full Self-Driving.”

Tesla now uses the brand name “Full Self-Driving (Supervised)” to describe its partially automated driver assistance system, and it sells it only on a subscription basis. In the past, Tesla packaged partially automated driving features in Autopilot standard, Enhanced Autopilot and Full Self-Driving tiers, and it offered some customers “beta” or early access to new features, which are not yet fully debugged. It sold the systems for a single up-front fee.

The DMV did not immediately provide a comment. Tesla didn’t immediately respond to a request for comment.

Tesla CEO Elon Musk has long promised investors and customers that the company’s cars would be upgraded over time via over-the-air software updates that would turn them into robotaxi-ready vehicles. That hasn’t happened yet, though the company’s systems have become more sophisticated.

After sales of its electric vehicles declined last year, Tesla’s future success hinges largely on its ability to deliver driverless systems that make their cars safe to use without a human at the wheel, ready to steer or brake at any time.

Tesla is now testing a handful of automated vehicles in its Robotaxi pilot in Austin, Texas. Last week, the company announced the start of production of its forthcoming Cybercab, a two-seater designed without a steering wheel or pedals, in Texas.

Tesla has for years presented its systems as if they were safe to use without an attentive driver. For example, in 2018 Musk appeared on CBS’ “60 Minutes” driving in a Model 3 with Autopilot engaged and correspondent Lesley Stahl in the passenger seat. Musk kept his hands off the wheel and told Stahl that he was “not doing anything,” while the car was driving itself.

However, Tesla’s owners manuals specify that drivers should not use FSD (Supervised) features without paying attention to the road.

In filings with California’s OAH, lawyers for the state’s DMV wrote that Tesla’s marketing for “Autopilot” and “Full Self-Driving” falsely suggested the cars are capable of operating autonomously.

Tesla’s attorneys alleged that the DMV never proved consumers in the state had been confused about whether its cars were safe to drive without a human at the wheel.

When Tesla used those brand names, the company’s attorneys argued, “It was impossible to buy a Tesla equipped with either Autopilot or Full Self-Driving Capability, or to use any of their associated features, without seeing clear and repeated statements that they do not make the vehicle autonomous.”

In a separate class-action lawsuit that’s winding its way through California courts, customers who purchased FSD expecting their cars to be upgraded into robotaxi-ready vehicles over time are asking for their money back.

Tesla was also held partly liable for a fatal crash involving Autopilot. During the trial, the Tesla owner said he had dropped his phone while driving and scrambled to pick it up, but thought the car’s Enhanced Autopilot system would brake if an obstacle was in the way. The suit resulted in a $243 million verdict against Tesla to be paid to the family of the deceased and an injured survivor of the crash.

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