The startup 's service has gained strength in recent years, as it allows it to provide financing to the holder of a claim to initiate or continue the legal process.
Qanlex, the litigation financing startup focused on continental law countries, closes a successful year. Founded by Argentines, the company has raised US$38 million in venture capital and already has a presence throughout Latin America. Its most recent partner is Chile, a country where it landed last November.
The Qanlex service has gained strength in recent years, as it allows the holder of a claim to provide financing to start or continue the legal process. The issue is simple: if the ruling is favorable, the financier receives a commission; if the result is adverse, no repayment is required.
This model is more common than it appears: it was born in the United Kingdom in the middle of the last century and gradually expanded to countries with Anglo-Saxon law. Qanlex's work is based on the premise that the most sophisticated litigation funds have not explored financing in Latin America very much. To boost its expansion, the fund has bet heavily on digital tools.
“One of our strategies is based on the development of technology. We work with software that searches for potential cases to finance in different countries. To be more specific, the platform searches for cases in judicial databases that might interest us due to the value of the claim or the nature of the process. From there, there is commercial contact with companies that have ongoing litigation,” explained Juliana Giorgi, General Counsel for Latin America at Qanlex to AméricaEconomía .
Under this criterion, the startup has concentrated its efforts on making its way into the construction sector. Giorgi points out that it is an industry with many litigations and disputes related to infrastructure contracts. These require a large investment and the companies involved have a significant cash flow problem.
On the other hand, the lawyer mentions that Qanlex participates in international events not only with the aim of positioning itself in the market, but also to promote an academic debate on the viability of litigation financing.
“The third-party funding industry has developed so rapidly in a short time that it has given rise to discussions about confidentiality duties and potential conflicts of interest. There has been a need to modify the rules of different arbitration centers to provide transparency as to who is behind a dispute by providing the capital so that everything is paid,” adds Giorgi. At the same time, Qanlex seeks to disseminate the most recent initiatives in the sector, such as the launch of specialized insurance for the litigation financing industry, something little known in the region.
Beyond the construction sector, the startup has explored mining and asset leasing cases in Peru, while in neighboring countries, trends vary depending on the context.
“In Ecuador we have several energy cases that include thermoelectric plants; in Costa Rica, cases of tourist real estate development; in Colombia, oil and energy cases. In fact, we are open to analyzing and financing any range of cases as long as they include a liquid asset transfer at the end of which the fund can take the remuneration,” says Giorgi.
