While most asset classes have been pummeled by the COVID-19 virus, AxiaFunder‘s crowdfunding platform is providing access to a non-correlated investment class that is unique when it comes to online capital formation.
Founded in 2019, AxiaFunder is the UK’s first for-profit litigation funding platform. Basically, you back the cost of a lawsuit and if the funded case wins, you receive a portion of the payout. Retail investors may join in to support pre-vetted UK and international lawsuits.
AxiaFunder’s latest investment opportunity, a portfolio of three commercial litigation cases, was said to be fully funded less than 24 hours after the launch of its marketing campaign. To date, AxiaFunder says it has in total raised £775,000 of litigation funding for 6 commercial cases.
Today, AxiaFunder has announced its second case win, returning a favorable 93.75% to investors in just 15 months, according to the platform. The breach of contract case was funded in February 2019, raising £12,000 to enforce an adjudication award against a property developer. The case was favorably settled following a three-party mediation.
AxiaFunder’s first case was a victory as well returning 43% to investors – in just 8 months.
AxiaFunder was founded by CEO Cormac Leech – a former top-ranked equity research analyst and founder of Liberum Alternative Finance. In a release, Leech said they are pleased to announce the platform’s second case win, which has produced solid returns to their investors through an Innovative Finance ISA eligible bond which was 83% principal protected via insurance.
“Despite market volatility in the wake of COVID-19, litigation funding offers retail and institutional investors an opportunity to diversify their investment portfolio. Unlike equities, litigation funding is uncorrelated to financial markets and the economy, continuing to generate healthy returns to investors while many other assets classes are underperforming in the current economic climate,” said Leech.
AxiaFunder reports that it has a strong pipeline of vetted cases that will be launched over the coming weeks.
The first of which is expected to be the relaunch of a pre-vetted case backing a ‘Francovich’ claim – an action seeking damages against a Member State for breaching EU law in a VAT dispute claim.
AxiaFunder says it expects a net 5.5x multiple on investor capital if the case wins at trial, which is expected in around 18 months.
“The litigation funding market is expected to grow as COVID-19 increases insolvency litigation. As the UK’s first for-profit litigation funding platform, AxiaFunder is well placed to provide access to capital for many of Britain’s SMEs, who would otherwise struggle to afford the cost of litigation,” added Leech. “AxiaFunder takes a stringent approach to vetting cases and only invests in those that have an estimated probability of a favourable outcome for investors of at least 70%. The vast majority of cases settle before trial with AxiaFunder’s investors typically getting paid before the claimant which improves returns.”
AxiaFunder itself raised funding via online capital formation in Seedrs offering.
Have a crowdfunding offering you'd like to share? Submit an offering for consideration using our Submit a Tip form and we may share it on our site!