LegalPay, a start-up focused on third-party litigation funding, has announced the successful closure of its first litigation fund. The Arbitration Focused SPV I, a smaller special purpose vehicle (SPV) designed for senior retail investors, was launched last month and has now been oversubscribed, according to a statement from LegalPay.
The SPV I was launched to create a pool of 8-12 legal cases to ensure capital diversification, while minimizing risk for the smallest fraction of investment. The fund allows retail investors to invest as little as Rs 25,000 in a single legal case.
At the same time, the start-up has also launched its second SPV which will focus on commercial disputes. Interestingly, the investment opportunity comes with a fixed pre-commitment cashback of Rs 1,000 on each investment.
The firm focuses on B2B business disputes that provide an opportunity of exact monetary value. Issues related to breach of contract, recovery claims, partnership disputes, cross-border transaction disputes, and tax disputes are typically reviewed. In addition, it focuses on mid-stage and late-stage litigation funding in specialized forums.
These SPVs help investors diversify by investing in a basket of business cases that typically generate a pre-tax IRR of over 20%. Incidentally, the entire investment process is digital and transparent, including investor document signing, KYC, claim basket tracking, and portfolio tracking and analysis.
Founded by Kundan Shahi in 2020, the Delhi-based startup is backed by venture capitalists such as 9Unicorns and LetsVenture.
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