Florida-based hedge fund Naples Global has partnered with litigation financing platform LegalPay to launch a $5 million (around Rs 38 crore) fund for Indian founders that will help them safeguard their rights during any kind of board-related disputes.
The fund has committed deployment of $5 million, with an option to increase the exposure for founders who are looking out for fighting their litigations and arbitration.
“Founders put their blood and sweat to build start-ups but often find investors arm twisting them on several fronts. Since most founders are first-generation entrepreneurs, they lack the financial muscle to assert their legal rights,” said Kundan Shahi, Chief Executive Officer at LegalPay.
Shahi also added that the idea behind this product is to create a level playing field for those disgruntled founders so that they don’t give up on their legitimate because of financial constrain.
"Our growing investor community continues to remind us that the demand for alternative investments is as increasing and now we need outside the USA, and LegalPay and their leadership team fit that category perfectly as they are creating a lucrative asset class in India/Asia," said Kelly Morris, partner at Naples Global LLC.
Morris further stated that it looks forward to expanding its asset allocation as the fund grows its US business and service into new international markets.
Founded in 2019, LegalPay claims to be India's first and only litigation and interim finance provider. It provides non-recourse funding in commercial legal claims in exchange for a share in the final recovery.
The startup is backed by investors such as Hedonova, 9Unicorns, LetsVenture, Venture Catalysts and Amity Innovation Incubator, among others.
In January, LegalPay launched a Special Purpose Vehicle (SPV) and healthcare-focused fund for retail investors for interim financing to mid-sized assets under bankruptcy and insolvency process.
LegalPay offered interim finance toYashomati Hospitals Pvt Ltd under the Insolvency and Bankruptcy Code (IBC), in October 2021.