SUMMARY
The strategic alliance, between LegalPay and Padmalaya, will provide solutions to businesses for financing legal expenses
As part of the deal, Padmalaya will disburse worth INR 1,000 Cr credit towards legal expenses
The development comes almost a month after LegalPay rolled out a $2 Mn equity fund called Justice and Inclusion (JAI) fund to back legaltech startups working towards financial inclusion
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Litigation and interim finance startup LegalPay has acquired a minority stake in Gujarat-based non-banking financial corporation (NBFC) Padmalaya Finserve.
The strategic alliance between LegalPay and Padmalaya, will help the company to offer businesses financing legal expenses, according to the statement.
As part of the deal, Padmalaya will disburse worth INR 1,000 Cr credit towards legal expenses.
Meanwhile, the acquisition will help LegalPay to further scale its legal financing solutions for businesses. Originally, at LegalPay, businesses pay their legal expenses via a credit up to INR 50 Lakh.
The development comes almost a month after LegalPay rolled out a $2 Mn equity fund called Justice and Inclusion (JAI) fund to back legaltech startups working towards financial inclusion.
Founded in 2019, Padmalaya Finserve is a joint venture with a solar company Goldi Solar.
“This is a one-of-a-kind partnership with the vision of revolutionising transactions in the legal and insolvency industry. LegalPay as a partner brings their sector expertise and robust tech infrastructure necessary for establishing a strong dominance in the sector,” said Ishver Dholakiya, founder and managing director of Goldi Solar.
Founded in 2019 by Kundan Shahi, LegalPay is an online litigation and interim funding platform. It offers financing solutions to businesses in the legal and insolvency market. Additionally, It partners with NBFCs to offer legal financing to businesses at no-cost EMIs.
For example, LegalPay holds a stake in the litigant company when that company wins the case or realises its legal case.
“This strategic equity acquisition in Padmalaya will help us go a long way in increasing our footprint in the legal, financial space. This will help us bring more innovative products catering to the legal expense market. Ishver Dholakiya has immense experience and valuable insights that would help us achieve our goals to make justice accessible and affordable for all,” said Kundan Shahi, CEO of LegalPay.
The startup claims to have boarded more than 150 law firms and 1000 businesses to date. It is anticipating to disburse INR 1,000 Cr by the financial year 2024.
In April 2022, LegalPay along with US-based hedge fund Naples Global rolled out a $5 Mn fund to protect the rights of Indian founders, which are in dispute with their company’s board.
According to a Future Market Insights report, the country’s legaltech space was pegged at around $27.6 Bn in 2021. The industry is expected to become a $69.7 Bn market by 2032, growing at a CAGR of 8.9% by the forecasted period (2032).
Like the other sectors of the startup ecosystem, legaltech too has been one of the investors’ favourite segments. For example, in late 2022, artificial intelligence-based legaltech startup Amikus AI raised more than INR 96 Lakh in a pre-seed funding round from Inflection Point Ventures.
Prior to that, India and Silicon Valley-based startup Oddr secured $2 Mn in its seed funding round from Saama Capital, Twin Ventures and angel investors across the globe.
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