LegalPay ventures into interim finance market by raising additional capital

A few months back this segment was almost untouchable for centuries, from closing two fund-raisers within a month.

I am pleased to share about LegalPay’s strategic capital raise in a funding round led by entrepreneur-turned-investor and former head of Thomas Cook, Ashwini Kakkar. A few months back this segment was almost untouchable for centuries, from closing two fund-raisers within a month.

LegalPay has raised an undisclosed funding round led by entrepreneur-turned-investor and former head of Thomas Cook, Ashwini Kakkar.

We are thrilled with the early traction we are witnessing in LegalPay, continuous interest from investors in this segment will enable us to unlock new opportunities.

LegalPay's unique ability to identify the investment themes along with the deep domain expertise of the risk underwriting team will ensure the turnaround of target companies. With interim finance, we will use Debtor in possession while investing with super-priority loans.

LegalPay's tech-enabled approach is exactly what allows us to tackle lower middle market cases in both litigation and bankruptcy," The new interim finance is a natural extension of our existing tech capabilities.

The Covid-19 pandemic has pushed a record number of companies into the insolvency process.

The pressure on the insolvency system has shown new cracks in the system because Resolution Professionals are struggling to raise interim finance to keep the defendant solvent. Interim finance has been given a super seniority status, implying it needs to get paid back first before all other creditors, and such an amount is 100% asset-backed with returns higher than most asset classes in the country.

At present the Interim Finance market is dominated by a handful of players such as Edelweiss ARC, private equity firms such as KKR India Financial Services Private Limited.

(Kundan Shahi is the CEO of tech focused B2B litigation finance company Legal Pay)