An article in Business Live covers the announcement from Sheffield-based FinLegal that it has raised £2 million in funding from the Northern Powerhouse Investment Fund II (NPIF II). The legal technology company offers a platform that can be used for the class actions or high volume small claims management, utilising automation and AI to increase efficiency and reduce costs. FinLegal plans to use the new investment to expand its operations and double its workforce.
The funding from NPIF II is a result of the fund’s mission to help small and medium sized businesses in the North of England scale up their operations, with the £660m fund providing loans that range between £25,000 and £2 million, or equity investments of up to £5 million. FinLegal specifically received funds that are managed in part by NPIF II and in part by Mercia Asset Management.
Steven Shinn, founder of FinLegal, provided the following comment on the announcement:
“The claims market is ripe for a platform like ours. Many claims are run on a no-win no-fee basis and increasingly there are fee caps, so operating costs are critical. Our solution reduces costs, automates but also improves client care and makes it possible to manage claims at a scale which might otherwise not be viable. It has already been adopted by the some of the leading claims firms and this investment will enable us to accelerate our international growth.”
Chris Borrett of Mercia Ventures said:
“FinLegal represents a new breed of AI-enabled LegalTech companies. The business has rapidly cornered a niche within the mass volume litigation market and is driving substantial productivity gains for major global law firms. Steven and his team have acquired clients across the UK, Australia and in the USA and set their sights on becoming one of the leading litigation platforms globally.”
Clio, the global leader in legal technology, announced it has raised US $900 million, based on a US $3 billion valuation, in a Series F investment round led by New Enterprise Associates (NEA). The round also includes new partners Goldman Sachs Asset Management, Sixth Street Growth, CapitalG, and Tidemark, who join current investors TCV, JMI Equity, funds and accounts advised by T. Rowe Price Associates, Inc. and by T. Rowe Price Investment Management, Inc., respectively, and OMERS. Marking a new era in its growth journey, Clio will continue to expand its multi-product platform, including further investments in its burgeoning AI portfolio and integrated legal payments. It will also accelerate its rapid market expansion upmarket and internationally, deepening its organic growth to more than 130 countries across the globe.
For 16 years, Clio has been at the forefront of creating innovative, cloud-based solutions tailored to the unique needs of the legal industry. Clio is the operating system for law firms, powering every aspect of the legal process. It simplifies law firm management by centralizing client intake, case management, document management, legal payments, and more. With more than 250+ legal technology software integrations, Clio is also the world’s largest legal technology platform, endorsed by more than 100 law societies and bar associations worldwide, including all 50 state bar associations in the United States.
“This historic raise was heavily oversubscribed, further demonstrating the overwhelming demand and confidence in Clio’s future,” said Jack Newton, CEO and Founder of Clio. “I’m thrilled to embark on this journey with NEA and our group of exceptional investors. The Clio operating system is the undisputed platform of the legal technology sector, engineered to not only meet but anticipate future industry demands. We are pioneering this future for our customers, driven by our mission to transform the legal experience for all. Our commitment to delivering unparalleled value propels every decision we make, and we are inspired by the massive opportunities ahead.”
Tony Florence, Co-CEO at NEA, has joined Clio’s Board of Directors. Mr. Florence commented, “Clio embodies everything NEA looks for in a growth-stage investment: an exceptional, purpose-driven team, market and product leadership, and stellar business physics. Clio is mission critical to law firms, and the company’s best-in-class retention and NPS are testaments to the team’s ability to continuously innovate, deliver immense value, and meet the dynamic needs of the legal sector. With the right foundation in place for continued market expansion and advanced AI capabilities, we believe the best is yet to come. We look forward to applying NEA’s company-building expertise to partner with Jack and the Clio team on their next phase of growth.”
Clio raised its Series E funding in April 2021, a US $110M growth equity round. Since then, Clio has grown its revenue beyond US $200M ARR and has expanded internationally to the APAC region, as well as upmarket to become the leader in mid-market cloud legal practice management software, serving more than 1,000 mid-sized firms in the United States alone. Clio’s all-in-one payments business has skyrocketed since its launch in 2022, now processing billions of dollars annually in legal-specific transactions. Additionally, Clio’s platform has been expanded to include:
Clio Duo proprietary generative AI solution to help lawyers complete routine tasks, and leverage their firm analytics to run a more efficient practice; including audit log functionality for court discovery (available in 2024)
Clio Accounting to manage firm finances in one system of record, designed to help keep law firms compliant
Module for personal injury lawyers with distinct litigation needs, and procedures for medical recordkeeping, this add-on offers rapid settlement estimates for high volume case assessments
Clio Draft intelligent document automation and court form libraries in 50+ jurisdictions
Electronic court filing services available directly in Clio to streamline court interactions
Legal Aid and nonprofit grant billing models, eligibility calculators, and dashboards
Google Local Service Ads directly embedded in the Clio platform to generate, screen, and intake local leads
“While we’re immensely proud of our growth to date, the real opportunity lies ahead of us,” continued Newton. “AI is ushering in an exciting and important new era for legaltech, and Clio is leading that transformation. There’s much to accomplish for the success of our customers so they can thrive in an economy that embraces technology in every interaction.”
Clio has more than 1,100 employees located across hub locations in North America, EMEA, and APAC regions. The company is actively hiring across all areas of its business including product, R&D, sales, marketing, and customer success.
Law firms Osler, Hoskin & Harcourt LLP and Wilson Sonsini Goodrich & Rosati served as legal counsel to Clio. William Blair acted as Clio’s exclusive financial advisor.
A prominent European finance company has announced it will be funding over 25,000 claims in a €1 billion class action against truck manufacturers, who were part of a price-fixing cartel.
Nera Capital, which has offices in Manchester, Dublin and The Netherlands, is focussing exclusively on group redress claims, helping consumers and small to medium sized businesses, fight for justice against antitrust behaviour by corporates.
In 2016, the European Commission found MAN, Volvo/Renault, Daimler, Iveco, and DAF broke European Union antitrust rules by colluding on truck pricing and on passing on the costs of compliance with stricter emission rules from 1997 to 2011.
The Commission imposed a record €2.93 billion fine on the manufacturers, except MAN as it revealed the existence of the cartel. All companies acknowledged their involvement and agreed to settle the case.
Speaking about this historic class action, Nera Capital Director, Aisling Byrne, said this investment will ensure truck owners receive justice for the damage the 14-year cartel caused. "The agreements covered both medium-duty trucks and heavy-duty trucks and affected the entire European Economic Area. While the cartel stopped running in 2011, the after affect was felt by truck owners in the following years, and it is important that those affected get their chance for justice.”
Nera Capital has appointed a leading German law firm to act for the claimants in the case.
When the European Commissioner for Competition Margrethe Vestager handed down the historic fine in 2016, she said it was not acceptable that the manufacturers were part of a cartel instead of competing with each other. In 2016 she commented on the more than 30 million trucks on European roads, which accounted for around three quarters of inland transport of goods in Europe, playing a vital role for the European economy.
Ms Byrne echoed these comments and said the firm's success is built through its strong industry relationships and a passion for justice. “This is a pivotal moment for corporate accountability,” she added. “Our investment underscores our commitment to supporting small businesses and consumers who have been impacted by antitrust violations. With a strong track record of committing over £475 million, in aggregate, into claims, we are excited to offer our support to truck owners across Europe, because we believe justice should be accessible to all. Nera Capital stands firm in its mission to level the playing field against corporate misconduct. This class action is not just about compensation but also about holding accountable those who undermine fair competition."
About Nera Capital
· Established in 2011, Nera Capital is a specialist funding provider to law firms.
· Provides Law Firm Lend funding across diverse claim portfolios in both the Consumer and Commercial sector.
· Headquartered in Dublin, the firm also has offices in Manchester and The Netherlands.
. Member of European Litigation Funders Association.
The European truck cartel case has long stood out as one of the most prominent examples of litigation funders looking to support mass claims against large companies over their breaches of competition rules. The latest announcement of a funder supporting such a claim continues to demonstrate the importance of these case types.
An article in Business Mondays highlights a recent announcement from Nera Capital, a legal finance firm based in Dublin, that it will be funding over 25,000 claims as part of the truck cartel case. The claims brought against truck suppliers has been one of the most high profile class action cases in Europe, following the 2016 European Commission ruling which found MAN, Volvo/Renault, Daimler, Iveco, and DAF guilty of breaking EU antitrust rules over their co-ordination of pricing.
Aisling Byrne, director at Nera Capital, highlighted the importance of third-party funding for the claims being brought against these truck manufacturers, stating that “while the cartel stopped running in 2011, the after effect was felt by truck owners in the following years, and it is important that those affected get their chance for justice.” The article also states that Nera Capital has appointed a German law firm to provide legal representation for the claimants it is funding.
Byrne also emphasised that Nera Capital’s investment in the truck cartel case aligned with “its mission to level the playing field against corporate misconduct”, and that this case “is not just about compensation but also about holding accountable those who undermine fair competition.”
As LFJ reported earlier this month, the world of patent litigation funding has once again generated a high-profile dispute, as Apple pressed a court to enforce a subpoena against Omni Bridgeway over the funder’s alleged role in a patent infringement case brought against the technology giant. The legal fight continues to evolve last week, as the two parties seek to find favourable ground in a venue of their choosing.
An article in Reuters provides a recap of the events that have led up to the current standoff between Apple and Omni Bridgeway, before shedding light on the current state of affairs. At issue is the court venue following Apple’s filing of a motion to compel compliance regarding its subpoena of Omni Bridgeway for information relating to the MPH patent infringement lawsuit. The case had been assigned to the Delaware district’s chief judge, U.S. District Judge Colm Connolly, who has become a familiar name in the litigation funding world over his standing order enforcing disclosure of third-party funding in patent cases.
Unsurprisingly, Omni Bridgeway filed a motion to transfer the matter to the Northern District of California, stating that this court is the venue which “issued the subject subpoena and that is presiding over the underlying litigation’. The motion argued that this transfer “promotes judicial economy and prevents the risk of inconsistent rulings”, and went on to point out that “Litigating this issue in California is not inconvenient for Apple, a California corporation, with California lawyers party to the underlying California litigation.”
In response, Apple’s lawyers responded to the motion to transfer in a letter to Chief Judge Connolly, “injects unnecessary delay into the briefing, and will likely delay resolution of Apple’s motion to compel.”
Omni Bridgeway’s motion to transfer can be read here. Apple’s letter responding to the motion can be read here.
Whilst the majority of coverage on third-party legal funding tends to focus on established jurisdictions like Australia, the UK and US, one of the countries showing signs of life for the funding sector is India.
An article in Economic Times looks at the rise of litigation funders in India and explores how this niche but growing market has seen startup funders focus on arbitration and insolvency disputes as an area to establish a market foothold. The article highlights nationwide data that shows ‘a total of 7,567 companies across sectors were brought into administration until March end’ and that ‘45 million cases are pending in courts across the country, including about six million cases in 25 high courts and 83,800 cases in the Supreme Court.’
Speaking with top executives at funders and leading experts from Indian law firms, the Economic Times article examines how these issues within the legal system, combined with the current economic climate, have created opportunities for these funders to provide much-needed capital to alleviate the backlog of cases waiting in the courts.
Kundan Shahi, CEO of LegalPay, offered some insights into the funder’s current business strategy and explained that whilst they are largely focused on plaintiff-side funding, they “have also started to fund defendants in certain cases.” As for the underlying business fundamentals of LegalPay’s investment model, Shahi said, “We are expecting a maximum timeline of 36 months to recover our investments and an average IRR (internal rate of return) of 22-27%, with an average return of 12-15%, on a case-to-case basis.”
Outside of traditional litigation funders, there are companies like Mumbai-based SingleDebt, who provide legal advisory services to those embroiled in disputes with creditors. SingleDebt’s founder Harish Parmar, illustrated how the company assists its clients “through negotiation and mediation with creditors,” but for situations where litigation is unavoidable SingleDebt will “explore TPLF (third-party litigation funding) options to ease the financial burden on our clients.” Parmar goes on to explain that these funders can still provide significant value to their clients, by enabling them “to pursue their claims without depleting their resources.”
As a former litigator who recently obtained his MBA, Andrew offers a unique perspective in his role of creating, developing, and maintaining business relationships with law firms and litigants as LF2 expands its commercial program.
Andrew is an Associate Director of Investments at LF2. In his role, Andrew works with the Underwriting and Investment team to both analyze and develop potential funding opportunities. Andrew received a Dean’s Merit Scholarship from Cardozo Law School and an MBA from Columbia Business School. Andrew practiced as a commercial litigator prior to entering the litigation finance industry.
Company Name and Description: Lex Ferenda Litigation Funding LLC. We specialize in funding single commercial cases starting at $1 million.
Area of Focus: Business development and underwriting.
Member Quote: I’m grateful to be able to make an impact in such a dynamic industry, particularly as it continues to grow and enhance outcomes within and beyond the legal community.
Litigation Lending Services (LLS), a pioneering force in the litigation funding industry for over 25 years, proudly announces the completion of a strategic $35 million credit facility with a leading Australian based global alternative asset manager. This credit facility further bolsters the Company's robust financial structure in tandem with its existing fund and balance sheet.
Known for its commitment to social impact investment alongside handling insolvency and commercial and class action claims, LLS continues its mission to support those in their legal battles while making a positive difference in the community.
As demonstrated by the recent announcement of the $180.4m settlement in the Stolen Wages Western Australia class action, LLS’s strategic approach to litigation financing combines rigorous case evaluation with a passion for driving positive societal change, making it an attractive opportunity for investors seeking both financial returns and meaningful contributions to the community.
"We are thrilled to have successfully secured a new finance partnership, reinforcing our financial stability and positioning us for continued growth and impact," stated Chair Shaun Bonétt. “This not only strengthens our ability to support meritorious cases but also reinforces our belief that everyone deserves fair access to legal recourse, regardless of their financial situation.”
With an impressive track record of fostering access to justice, Litigation Lending Services remains at the forefront of the industry. As LLS continues to celebrate its 25th anniversary, the funding further ensures that the Company is well positioned to continue its vital work providing crucial support to those who might otherwise lack access to the legal system.
Litigation Lending Services is (LLS) a leading litigation funder with 25 years of experience in supporting insolvency, commercial claims and class actions with a key focus on funding social impact litigation. With a strong financial foundation and a commitment to justice, LLS empowers claimants to pursue meritorious cases, driving both financial and societal benefits.
Litigation Capital Management Limited (AIM:LIT), an alternative asset manager specialising in dispute financing solutions internationally, is pleased to provide an update on its business for the 2024 financial year ended 30 June 2024.
We are pleased to report another successful year with eight investments concluding in the period generating realisations for LCM, inclusive of performance fees, totalling AUD$56.0m. This is compared to LCM’s invested capital of AUD$23.8m, representing a multiple on invested capital (MOIC) of 2.4x. This performance aligns with our long-term track record of an average MOIC of 2.7x from investments concluded within the last 13 years, and underscores the successful execution of our strategy.
Moreover, we have made a strong start to our 2025 financial year. Shortly after the 2024 financial year end, a single case investment concluded generating realizations for LCM of at least AUD$12.5m, including performance fees, compared to LCM’s invested capital of AUD$1.5m, representing a MOIC of 8.3x.
Period
Realisations (AUD$m)
Invested Capital (AUD$m)
MOIC multiple
H1
28.4
8.8
3.2x
H2
27.6
15.0
1.8x
FY24
56.0
23.8
2.4x
Post Period end
12.5
1.5
8.3x
The average duration of cases concluded in FY24 was 45 months - slightly longer than our general expectation of 36-42 months, which remains unchanged. This largely reflects the COVID related delays that we have previously communicated which impacted several of the investments that concluded in the period. Importantly, elongated time has not adversely impacted on investment performance.
We continue to invest in what we believe are the highest quality legal claims, collaborating with leading law firms and barristers in our respective markets. We have seen high demand for our capital in the second half of the year and expect to report New Commitments for FY24 in excess of AUD$250m (FY23: AUD$176m). It remains our key strategic priority to continue to grow New Commitments, and thus ensure LCM achieves additional financial scale.
Our current portfolio of investments, both direct investments that are entirely funded via our own balance sheet and those in which we are co-invested alongside our managed external funds, continue to perform in line with our expectations.
Patrick Moloney, CEO of LCM, commented: “The performance of our concluded investments in our 2024 financial year highlights the strength and effectiveness of our investment strategy. Through our rigorous investment process, we have assembled a high-quality portfolio of uncorrelated legal finance assets that are positioned to deliver attractive future aggregate investment performance. Given our access to capital, further growing New Commitments remains our key strategic priority and we are well on track. We see significant upside potential here.
“We look forward to updating our investors on our strategic progress with our full-year results presentation on
19 September and are excited about our future opportunities.”
Below is a brief summary of selected investments that concluded in the second half of our 2024 financial year.
Binding Settlement reached - Direct balance sheet Investment
A successful outcome in a dispute investment which forms part of LCMs portfolio of 100% direct investments has been achieved. The proceedings were heard in the Supreme Court of Western Australia and included two levels of appeal at which LCM’s funded party was successful at each level. A binding settlement deed has been executed by the parties resulting in the realisation of LCM’s investment. The investment is one of four legacy disputes held at cost within our financial statements. Details of the returns are highlighted below:
AUD$m
Investment performance
Invested capital
2.8
Investment return
9.2
Total revenue
12.0
MOIC
4.3x
Binding Settlement reached - Direct balance sheet Investment
A further successful outcome was achieved with respect to a portfolio of insolvency claims related to the failure of an Australian listed construction company. A binding settlement deed was executed by the parties resulting in the realisation of LCM’s investment. The investment also forms part of LCMs portfolio of 100% direct investments. Details of the returns are highlighted below:
AUD$m
Investment performance
Invested capital
2.8
Investment return
7.4
Total revenue
10.3
MOIC
3.7x
Furthermore, below is a summary of the investment that concluded shortly after our financial year end.
Bilateral Investment Treaty - Fund I Investment
LCM funded a claim advanced in respect of a breach of a bilateral investment treaty and brought under the International Centre For Settlement of Investment Disputes (ICSID) Convention. The Tribunal issued an award in July 2023 in favour of LCM’s funded party for USD$76.7m plus interest and costs. The Respondent sought to challenge the award, but the parties have now reached a settlement in advance of the annulment hearing. The terms of the settlement are confidential.
The claim forms part of LCM’s managed Global Alternative Returns Fund (“Fund I”) and was funded directly from LCM’s balance sheet (25%) and Fund I investors (75%). Details of the returns are highlighted below:
AUD$m
Investment performance
LCM performance metrics
Fund I performance metrics
Invested capital
5.9
1.5
4.4
Investment return
23.3
5.8
17.5
Total revenue
29.2
7.3
21.9
MOIC on investment
5.0
5.0
5.0
Performance fee*
-
5.2
(5.2)
Gross profit
23.3
11.0
12.3
MOIC inclusive of performance fees
5.0x
8.3x
3.8x
*The investment returns are subject to change based on the prevailing FX rate and timing of distribution
About LCM
Litigation Capital Management (LCM) is an alternative asset manager specialising in disputes financing solutions internationally, which operates two business models. The first is direct investments made from LCM's permanent balance sheet capital and the second is third party fund management. Under those two business models, LCM currently pursues three investment strategies: Single-case funding, Portfolio funding and Acquisitions of claims. LCM generates its revenue from both its direct investments and also performance fees through asset management.
LCM has an unparalleled track record driven by disciplined project selection and robust risk management.
Currently headquartered in Sydney, with offices in London, Singapore, Brisbane and Melbourne, LCM listed on AIM in December 2018, trading under the ticker LIT.
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