Litigation financing startup LegalPay has made its second successful exit in less than a year of providing interim finance to real estate firm Sare Gurugram Pvt Ltd, the New Delhi-based company said in a statement on Tuesday.
LegalPay provided an undisclosed amount as interim finance to the debt-laden Sare Gurugram in August last year.
While the exact financial details of the transaction remain undisclosed, the startup claims to have clocked an internal rate of return (IRR) of 23%.
In insolvency, interim finance is a short-term, secured lending for a period of 6-12 months granted to the debt-ridden companies undergoing corporate insolvency resolution process (CIRP).
Sare Gurugram, the unit of Sare Homes, had defaulted on dues to creditors for the construction of a township in the outskirts of Delhi and was thus admitted under CIRP in March 2021 following a petition filed by Asset Care and Reconstruction Enterprises Limited.
In April this year, the National Company Law Tribunal (NCLT) approved a Rs 990 crore debt resolution plan to revive Sare Gurugram Private Limited which was submitted by a consortium consisting of KGK Realty (India) Pvt Ltd and Dhoot Infrastructure Projects Ltd.
In June 2022, LegalPay made its first successful exit from its interim finance investment to debt-laden Yashomati Hospitals which was admitted for insolvency in March 2021. The resolution plan submitted by Kauvery Medical Care was approved by the Bengaluru bench of the National Company Law Tribunal (NCLT) on 30 May 2022.
Founded in 2019 by Shahi, LegalPay provides funds to corporate debtors who need interim finance that ranges from Rs 30 lakh-50 crore.
In May, the startup floated a $3 million (Rs 24.8 crore) fund to finance sports disputes.
In 2021, Legalpay secured an undisclosed sum in a seed funding round led by 9Unicorns - the venture fund set up by incubator and accelerator Venture Catalysts.
The funding round was also participated by early-stage investment platform LetsVenture along with angel investors Ambarish Gupta, founder of New York-based private equity fund Basis Vectors and founder of Knowlarity.