LegalPay, a third-party litigation financing platform, has launched an alternative investment product for retail investors. Investors can invest and diversify in a basket of cases for a minimum amount of ₹ 25,000.
The company has created a Special Purpose Vehicle (SPV) to create a set of 4-8 business cases to ensure the diversification of investors’ capital to generate profitable IRRs and minimize risk.
The first SPV for top retail investors went live on August 10 and investors can invest directly on the company’s website through a digital process. The entire investment process is digital, including investor document signing, KYC, claims basket tracking, portfolio tracking and analysis, etc.
This SPV is designed to finance arbitrations (both national and international), mid- and late-stage litigation, specialized forums, and claim buying opportunities. These possible claims / cases are resolved in a limited way in time and all those claims / cases have a relatively shorter investment cycle.
This SPV has a focus on B2B (business-to-business) business disputes, where both parties are businesses fighting a business dispute such as breach of contract disputes, recovery claims, association disputes, unfair competition claim , term sheet disputes, cross-border transaction disputes, tax disputes, intellectual property disputes, etc. The SPV will have a life cycle of 36 months (extendable for 24 months). Still, distributions will begin to happen to investors as the inverted cases are resolved, approximately 12 months from the closing of the SPV.
Founded by investor Kundan Shahi in 2020, LegalPay helps entities / companies ease the financial burden of litigation cases such as shareholder and intellectual property rights disputes with the help of technology. The New Delhi-based start-up, backed by venture capital firms such as 9Unicorns and LetsVenture and by angels such as Ashwini Kakkar, former president of via.com, and Ambarish Gupta, ex-founder of Knowlarity, among others.