LegalPay, a start-up focused on third-party litigation finance, has announced the successful closure of its maiden litigation fund. The Arbitration Focused SPV I, a smaller ticket special purpose vehicle (SPV), designed for upper-retail investors, was launched last month, and has now been oversubscribed, a LegalPay statement said.
The SPV I was launched to create a pool of 8-12 legal cases to ensure diversification of capital, while minimising risk for the smaller fraction of investment. The fund allows retail investors to invest as low as Rs 25,000 in a single legal matter.
Meanwhile, the start-up has also launched its second SPV that will focus on commercial disputes. Interestingly, the investment opportunity comes with a pre-commit flat cashback of Rs 1,000 on each investment.
The venture focuses on B2B commercial disputes that offer an opportunity of an exact monetary value. Matters related to breach of contract, recovery claims, partnership disputes, cross-border transaction disputes and taxation disputes are typically considered. Further, it focuses on financing medium and late-stage litigations in specialised forums.
These SPVs help investors diversify by investing in a basket of commercial cases that typically generate a pre-tax IRR of over 20 per cent. Incidentally, the entire investment process is digital and seamless, including signing investor documents, KYC, tracking of the basket of claims, and portfolio monitoring and analytics.
Founded by Kundan Shahi in 2020, the Delhi-based start-up is backed by venture capital firms such as 9Unicorns and LetsVenture.
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