1 min read.Updated: 21 Aug 2021, 06:32 PM ISTLivemint
The company has created a Special Purpose Vehicle (SPV) to create a pool of 4-8 commercial cases to ensure diversification of investor’s capital to generate lucrative IRRs and minimized risk
LegalPay, a third-party litigation funding platform, has launched an alternative investment product for retail investors. Investors can invest and diversify across a basket of cases for a minimum amount of ₹25,000.
The company has created a Special Purpose Vehicle (SPV) to create a pool of 4-8 commercial cases to ensure diversification of investor’s capital to generate lucrative IRRs and minimized risk.
The first SPV for upper retail investors went live on 10 August and investors can invest directly on the company's website through a digital process. The entire investment process is digital including signing of investor documents, KYC, tracking of the basket of claims, portfolio monitoring and analytics, etc.
This SPV is designed to finance arbitrations (both domestic and international), medium and late-stage litigations, specialized forums and claim buyouts opportunities. These potential claims/cases are disposed of in a time-bound manner and all of such claims/cases have a relatively shorter investment cycle.
This SPV has a focus on B2B (business-to-business) commercial disputes, in which both parties are businesses fighting over a commercial dispute such as Breach of Contract Disputes, Recovery Claims, Partnership Disputes, Unfair Competition Claim, Term-sheet Disputes, Cross Border Transactions Disputes, Taxation Disputes, Intellectual Property Disputes, etc. The SPV will have a life cycle of 36 months (extendable by 24 months). Still, the distributions will start happening to the investors as and when the invested cases resolve, approximately starting 12 months from the SPV's closure.
Founded by 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 and by marquee angels including Ashwini Kakkar, ex-chair via.com, and Ambarish Gupta, ex-founder of Knowlarity, among others.