First UK For-profit Litigation Funding Platform Launches Public Capital Raise on SEEDRS
- AxiaFunder 107% funded in private mode
LONDON, March 10, 2020 /PRNewswire/ -- AxiaFunder ("AF"), the first UK for-profit litigation funding platform, announces the public launch of its SEEDRS capital raise - (https://www.seedrs.com/axiafunder). The capital raising is open until early April.
Key highlights of the capital raising and AF business model include:
- Seeking an additional £200,000+ of equity working capital - EIS eligible;
- 107% funded in private mode, signalling strong support for the company;
- Over 380 existing HNW and sophisticated retail case investors, plus institutions;
- Stringent vetting with investment only in legal cases with a high (70%+) expected probability of winning;
- Conservatively estimated net annual investor returns of 20%-30%+ which are uncorrelated to the wider market/economy;
- First mover advantage - high margins and opportunity to scale; and
- Helps address the shortage of capital for smaller cases; improving access to justice.
AF, founded in 2019 by CEO Cormac Leech - a former top ranked equity research analyst and founder of Liberum Alternative Finance – and fellow INSEAD MBAs Rabin Tambyraja & Xuemei Liu, is an innovative commercial litigation funding platform. AF enables retail and institutional investors to invest in pre-vetted UK and international litigation cases requiring funding of up to £1,000,000.
To date AF has funded five cases from a case pool of 140, including its first case requiring over £500,000 in December 2019. Its first case win produced a 43% net investor return in eight months, with no case losses to date.
CEO and Founder of AxiaFunder, Cormac Leech said:
"As the cost of litigation rises, litigation funding is more important than ever to the rule of law and to a more inclusive society. AxiaFunder provides capital for smaller commercial litigation cases thereby helping the legal system to function more effectively."
"AxiaFunder's litigation funding platform enables SMEs and individuals to source lower cost and more flexible capital for carefully vetted cases that otherwise often would not progress. Policy makers at the Ministry of Justice are actively encouraging firms such as AF to source the litigation funding that they describe as the 'lifeblood of the legal system', helping to offset the funding shortfall as Government legal aid is being steadily withdrawn."
"AxiaFunder's efficient use of capital and lean operating model relying heavily on technology enables us to profitably fund smaller commercial claims, while still achieving high margins and strong case volumes."
"Unlike equities and high yield bonds, our returns are uncorrelated to the market or economy, and as one of the first litigation platforms in the UK we have the opportunity to scale and achieve positive network effects before other platforms enter the market. The lack of competition means that we have relatively good pricing power and high margin potential compared to investment platforms in other sectors. In due course our aim is to increasingly use technology to deploy a de-centralised case assessment approach which should enable the business to scale rapidly."
Notes to Editors
- The fund raise is at a pre new money valuation of approximately £3.2m.
- AF's FCA-regulated model (AF is an appointed representative of FCA regulated ShareIn) has a differentiated approach compared to other litigation funders such as Burford Capital and Augusta Ventures.
- AF provides investors direct access to litigation finance as an alternative asset class, by individually platform-funding each case which eliminates cash drag and also provides a natural exit. By contrast other funders raise large pools of capital that we believe are often relatively inactive.
- Most of AF's cases are fully underwritten, providing certainty of funding to the claimant.
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