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LegalPay, a third-party litigation finance company, has announced that it has successfully closed the Arbitration Focused SPV I, a smaller ticket special purpose vehicle designed for the upper-retail investors. The offer was oversubscribed in a record time without any expenses on customer acquisition, the company claimed in a statement on Tuesday.

Following this, LegalPay also announced its second SPV focussing on commercial disputes with a pre-commit flat cashback of 1,000 on every investment.

The SPV I was launched to create a pool of 8-12 legal cases to ensure diversification of capital in minimising risk even for the smaller fraction of investment. Retail investors could invest in any case for as little as 25,000 only. 

“Raising VC money only gives us runway, but this raise from customers is all about execution. Without a single rupee in customer acquisition, we achieved this number. This is only the beginning of a plethora of new opportunities that LegalPay will be providing to its investors shortly," said Kundan Shahi, Founder and CEO of LegalPay.

The strong organic influx of capital in litigation financing asset class demonstrates the maturity of Indian investors to understand and diversify in newer asset classes. Globally, litigation financing is a very matured asset class, giving returns better than any other class.

Until now, only UHNIs, HNIs, and family offices had access to this asset class. While LegalPay continues to work with them in helping them diversify their portfolio, it has now also opened the access of this asset class to upper-retail category investors. The above SPV is the first of such asset classes, with many more to follow suit. 

LegalPay focuses on B2B commercial disputes in which a clear monetary value is visible such as breach of contract disputes, recovery claims, partnership disputes, cross-border transaction disputes, taxation disputes, etc. LegalPay focuses on financing medium and late-stage litigations that are in specialized forums, claim buyout opportunities, and arbitration cases (both domestic and international). LegalPay structures these SPVs in an innovative way so that the investors start realising the returns as and when the underlying basket of cases gets resolved. 

Such SPVs provide diversification to the investors by investing in a basket of commercial cases, generating a Pre-Tax IRR of 20-25%+. The entire investment process is digital and seamless including the signing of investor documents, KYC, tracking of the basket of claims, and portfolio monitoring and analytics.

Founded by season investor Kundan Shahi in 2020, LegalPay helps entities/businesses ease the financial burden of litigation cases such as shareholder and IPR related disputes with the help of technology. The New Delhi-based start-up, backed by venture capital firms such as 9Unicorns and LetsVenture.

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