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AxiaFunder

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Commercial litigation funding platform offering investors access to pre-vetted cases

127%
 - 
Funded 1 Mar 2020
£200,000 target
£256,780 from 154 investors
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Business overview

Location London, United Kingdom
Social media
Website www.axiafunder.com
Sectors Finance & Payments Digital B2C
Company number 10532108
Incorporation date 19 Dec 2016
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Investment summary

Type Equity
Valuation (pre-money) £3.2M
Equity offered 7.34%
Tax relief

EIS

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Business highlights

  • One of the first UK for-profit litigation funding platforms
  • Launched in 2019; funded 5 cases selected from case pool of 140
  • Total amount funded is £684,000 to date; 355 registered investors
  • First case win produced 43% net return in 8 months
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Key features

  • Secondary Market
  • Seedrs nominee min. £20.00 +
  • Pay by Bank payments not accepted
  • Idea
  • Team
  • Updates
  • Investors 154
  • Discussion
  • Documents

Idea

Introduction

Once the preserve of hedge funds and other large institutions, private investors can now share in the attractive potential returns offered by litigation finance.

To the best of our knowledge, AxiaFunder is the UK’s first commercial litigation funding platform. The platform launched in January last year and aims to connect eligible investors (typically institutions, high-net-worth or sophisticated retail investors) with claimants seeking funding.

Investors receive a return on their capital if the case wins and lose some or all of their capital if the case loses.

AxiaFunder brings together a mix of finance, litigation funding and startup expertise. AxiaFunder's head of case assessment, Michael Lent has significant experience in commercial litigation. Michael was first registered as a solicitor in 1978.

By matching pre-vetted litigation cases with funders, AxiaFunder is able to create new investment opportunities while offering claimants a viable solution to their funding requirements.

Intended impact

The UK litigation funding market is growing, yet we believe that the market for smaller claims (requiring <£1m in funding) remains relatively underserved.

Enter AxiaFunder - the litigation crowdfunding platform aimed at legal claims requiring funding from £10,000 up to £1 million.

Small businesses and individuals may find themselves confronted with prohibitive legal costs when defending their interests. AxiaFunder aims to help "level the playing field".

At AxiaFunder we take a rigorous approach to assessing potential deals: amongst a number of important criteria, cases must have strong legal merits, attractive economics (damages to cost-to-litigate ratio of typically at least 5x), and a high chance of enforceability of any judgement.

For investors, litigation funding offers a ready way to diversify exposure. Legal claims are uncorrelated with traditional asset classes, such as equities, bonds, property or commodities, and instead have their own unique risk/return profile.

Substantial accomplishments to date

- To the best of our knowledge, we have developed the first for-profit commercial litigation funding platform in the UK accessible by retail investors.
- Appointed Representative of an FCA regulated Firm, ShareIn; partnered with an FCA regulated Fund Manager, Enterprise Investment Partners.
- Set up a flexible investment structure that enables cases to be structured as either equity or bond investments (IFISA eligible).
- Launched in January 2019 with the first case fully funded within 7 days and the third in 7 hours; 5 cases funded to date.
- Attracted over 355 registered investors so far with very limited marketing budget, including several institutions
- Funded first case requiring over £500,000 in December 2019
- Featured in a number of important publications including the Financial Times, Times and City AM
- Won award as Best Commercial Litigation Crowdfunding Platform 2019 by Wealth & Finance.
- Secured a pre-funding partnership providing increased certainty to claimants.

Monetisation strategy

AxiaFunder generates revenues by firstly charging claimants an Upfront Fee typically equal to 10% of the funds we raise for their case on our funding platform.

Secondly, on a successful outcome AxiaFunder receives a Performance Fee of a further 20% of the return due to the case funders.

Take the hypothetical example of a legal claim requiring £100,000 under those terms. In such case Axia could receive 10% of £100,000 or £10,000 in platform revenues at the onset of the case.

Assume then that this hypothetical dispute reaches a successful resolution after a period of 24 months with the claimant paying a fee of 100% pa on the invested capital (competitive with typical benchmarks for litigation funding). The claimant would have paid £200,000 on their invested capital, of which £40,000 would be payable to Axia as a Performance Fee, with the balance paid to case investors.

So, in this hypothetical example AxiaFunder could expect to generate total revenues of £50,000 from a single successful £100,000 claim.

Use of proceeds

AxiaFunder plans to use the proceeds of this funding round in three major areas: (i) making key hires particularly to strengthen its case origination and assessment capability; (ii) further development of its technology platform including the use of big data/ smart data learning techniques for screening claims; and iii) in its marketing efforts to build the AxiaFunder brand and grow its investor base.

Breaking down this spending into the key categories:

- Key staff cost 66%
- Marketing 5%
- Compliance and Legal advice 21%
- Technology 9%

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Only shareholders can access this page

If you successfully purchase a share lot of this business, you will be granted access.

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Only shareholders can access this page

If you successfully purchase a share lot of this business, you will be granted access.

Buy shares

Only shareholders can access this page

If you successfully purchase a share lot of this business, you will be granted access.

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Investing involves risks, including loss of capital, illiquidity, lack of dividends and dilution, and should be done only as part of a diversified portfolio. Please read the Risk Warnings before investing. Investments should only be made by investors who understand these risks. Tax treatment depends on individual circumstances and is subject to change in future.

This webpage has been approved as a financial promotion by Seedrs Limited ("Seedrs"), which is authorised and regulated by the Financial Conduct Authority. It is not intended to be a promotion of any individual investment opportunity and is not an offer to the public. The summary information provided about investment opportunities on this webpage is intended solely to demonstrate the types of investments available on the Seedrs platform, and any investment decision should be made on the basis of the full campaign. Full campaigns are available to investors who have become authorised to invest on the Seedrs platform. All investment activities take place within the United Kingdom, and any person resident outside the United Kingdom should ensure that they are not subject to any local regulations before investing.

Seedrs does not make investment recommendations to you. No communications from Seedrs, through this website or any other medium, should be construed as an investment recommendation. Further, nothing on this website shall be considered an offer to sell, or a solicitation of an offer to buy, any security to any person in any jurisdiction to whom or in which such offer, solicitation or sale is unlawful. Seedrs does not provide legal, financial or tax advice of any kind. If you have any questions with respect to legal, financial or tax matters relevant to your interactions with Seedrs, you should consult a professional adviser.

Tax Relief (SEIS)

This business is eligible for SEIS relief - providing qualifying investors with income tax relief of 50% of their investment and certain other tax reliefs. Tax treatment depends on individual circumstances and is subject to change in future. Click to learn more.

Tax Relief (EIS)

This business is eligible for EIS relief - providing qualifying investors with income tax relief of 30% of their investment and certain other tax reliefs. Tax treatment depends on individual circumstances and is subject to change in future. Click to learn more.

Valuation (pre-money)

Valuation rounded from £3,217,480

This is the fully-diluted pre-money valuation of the business (i.e. before the new investment comes in and including issued options and other equity interests). In contrast, the post-money valuation is based on inclusion of the new investment in the value.

It is calculated as the pre-money valuation plus the amount of new investment. e.g. If Company A is ascribed a pre-money valuation of £1,200,000 by prospective investors investing £300,000, its post-money valuation is £1,500,000.

Pitch type

There are 5 types of investment pitch available on Seedrs.

  • Equity
  • Convertible
  • Fund
  • Cohort
  • Secondary

Investing in a regular equity campaign is the simplest and most common way to invest in a startup. You decide which business you want to invest in, and if the campaign hits its funding target then you will become one of their shareholders. As the company becomes more valuable, so do your shares; allowing you the opportunity to share in the future success of the business.

Learn more about pitch type on Seedrs

Equity Offered

The equity offered is the percentage of the company’s shares being issued in return for the amount of investment raised.

When the amount raised is less than 100%, the equity offered is based on the target raise. Once the company has raised over 100% it is based on the total raised.

In some scenarios, entrepreneurs may accept additional direct investment after closing their Seedrs campaign. Provided this is within 6 months of the closing and on the same terms, we do not typically offer pre-emption rights on that extra investment (where you have the opportunity to invest again to maintain your percentage shareholding).

Learn more about investing and pre-emption rights.

Seedrs nominee

This shows if you are able to choose, when making an investment, that you be represented by, and your shareholding be managed by, the Seedrs nominee.

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Custodian

If you invest in this Campaign, Seedrs will act as Custodian rather than provide our standard nominee service. This is due to the fact that the business is not directly involved in the share sale and Seedrs will not benefit from any rights under a shareholder agreement. As a result, Seedrs will handle administrative tasks as we do normally, but you will not have information or voting rights, updates from the business, preemption on future fundraising, or ongoing support about business trading activity.

Learn more about Custodian here

Secondary market

This shows if the business has opted-in or opted-out of allowing its shares to be bought and sold on the secondary market.

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Direct investment

This is an option to invest and hold shares 'directly' in the company (rather than via the Seedrs Nominee). This option is only available to those investing over the threshold amount, which is determined by the fundraising company.

If you choose to hold your shares directly, you will be responsible for any contractual or administrative arrangements with the company you are investing in.

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Payment options

We are not able to accept card payments for investments into this sector. You can pay for your investment by creating a bank transfer, using funds in your investment account or create a Pay by Bank payment. Your investment will only be completed once the funds have reached our account.

Business Involvement

This Campaign offers shares for sale in business that is not directly involved in this Campaign or the sale. As a result, the Campaign and post-investment experience, including investor rights, will differ from a business-led campaign on Seedrs. Most notably, the business will not engage with investors in the discussion forums both during and after the sale or provide any updates to investors.

Learn more here

Payment options

We are not able to accept Pay by Bank payments for investments into this sector. You can pay for your investment with a card payment, by creating a bank transfer or by using funds in your investment account. Your investment will only be completed once the funds have reached our account.

Drawdowns

This campaign offers the ability to pay for an investment by drawdowns.

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