Mike Lynch, former chief executive of UK software group Autonomy, is backing a British start-up that uses artificial intelligence to help lawyers with due diligence in mergers and acquisitions.

Mr Lynch, who had criticised Hewlett-Packard’s handling of due diligence in its disastrous $11.1bn deal to buy Autonomy, is investing through Invoke Capital, his $1bn investment vehicle focusing on European technology.

He is providing $3m in funding for Luminance, which uses machine learning to read and understand complex legal information and automate due diligence for dealmaking.

“It is not an understatement to say that this is an application of artificial intelligence that will completely transform the due diligence process, which is perhaps long overdue,” he said.

HP announced an $8.8bn writedown of the value of Autonomy the year after the 2011 deal, accusing its management of a broad range of financial falsehoods that Mr Lynch and other former executives have vociferously denied.

Invoke is Luminance’s sole investor, though Mr Lynch said on Wednesday that the company was open to bringing in other investors if they can “show a case as to why the are very useful for the business”.

Like Mr Lynch’s previous investments, Luminance’s technology is based on research into Bayesian mathematics at the University of Cambridge. The company was set up last autumn, and since the beginning of this year, the start-up has worked with Slaughter and May, the “magic circle” law firm, to test and pilot its software.

Slaughter and May has represented Mr Lynch in the past, and advised Autonomy on its takeover by HP.

Sally Wokes, a partner at Slaughter and May who worked on the development of the software, said Luminance could cut in half the time spent by lawyers on due diligence investigations.

However, Ms Wokes said she did not expect the software would lead to lawyers being replaced by the technology.

“We don’t anticipate any cut in numbers, neither do we necessarily anticipate any cut in hours,” she said. “What we do anticipate is more focus on perhaps the higher-level points.”

“We can now spend the time that we would have spent actually finding the issue, really thinking about the issues, thinking about the recommendations to our client,” Ms Wokes added.

Luminance has since signed a contract with Slaughter and May. The company said on Wednesday that it intended to announce contracts with other law firms “in the coming months”.

Mr Lynch, one of the most prominent figures in British technology, is best known for founding Autonomy. Last week, UK tech firm Micro Focus said it had agreed to buy Hewlett Packard Enterprise’s software arm, including the remnants of Autonomy, in an $8.8bn deal that will create one of the largest software companies in the UK by revenue. That deal is expected, in part, to draw a line under fierce disagreements between Mr Lynch and HP over Autonomy’s value at the time of the 2011 sale. The acrimonious dispute led to regulatory investigations and multiple lawsuits, and a legal case between the former Autonomy and HP is expected to be heard in UK courts next year.

Since 2013, Mr Lynch has shifted his focus to investing, raising $1bn to set up Invoke, which has previously made three high-profile investments.

Invoke initially invested between $10m and $20m in the UK cyber security group Darktrace in 2013, one of the company’s first backers. Following a $65m investment from KKR in June, Darktrace is now valued at more than $400m.

Invoke also invested between $4m and $9m in Neurence, a cloud-based software platform that recognises real-world objects and links them to digital content. In 2014, the investment vehicle led a $13.75m investment in Sophia Genetics, a Swiss company.

Mr Lynch said on Wednesday that Invoke had made further undisclosed investments in start-ups.

In April, Mr Lynch signed an open letter with other founders and chief executives of well-known UK start-ups, arguing that “leaving the EU will undoubtedly undermine the ability of Britain’s entrepreneurs to start up, innovate, and grow”.

However, on Wednesday Mr Lynch said he was confident in pressing ahead with Luminance, even amid economic uncertainty after June’s Brexit vote.

“The vintage returns always come when you invest at the worst time,” he said. “The worst returns always come when you invest at the point when everyone is going crazy on tech.”