Legalist, a firm that funds third-party lawsuits, has hired an investment director from SoftBank as CFO as litigation finance

Legalist

Sean Liu, Legalist CFO

• Legalist, which invests in commercial litigation that requires less than $1 million in funding, raised $100 million for its second fund this year.
• Sean Liu, a former SoftBank investment director who helped set up the firm's Shanghai office, joined Legalist as CFO.
• SoftBank, known for its big bets on tech companies, has had a rough year in 2019. After WeWork's attempted IPO, SoftBank is reportedly considering a $5 billion bailout of the company at a sub-$8 billion valuation, less than they've invested in the company.
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Litigation finance, or funding third party lawsuits for a fee, is having a moment.

Legalist, which invests in commercial litigation that requires less than $1 million in funding, raised $100 million for its second fund this year. And it's now hired Sean Liu, a former SoftBank investment director, as the CFO.

Legalist was founded in 2016 with funds from Y Combinator. Cofounder Eva Shang is a Peter Thiel fellow, but she told Business Insider in 2016 that Legalist was "staying away" from funding lawsuits like Thiel's sustained suits on Gawker Media. Instead, it's funding medium-sized commercial lawsuits, sourced with an algorithm that scrapes state and federal court data.

Liu spent a year at SoftBank, leaving this September. While at SoftBank, he helped to set up the firm's Shanghai office and led some of the firm's Chinese investments.

SoftBank, known for its big bets on tech companies, has had a rough year in 2019. SoftBank's Vision Fund has invested over $10 billion in WeWork, most recently this January at a $47 billion valuation. After WeWork's attempted IPO, SoftBank is reportedly considering a $5 billion bailout of the company at a sub-$8 billion valuation, less than they've invested in the company.

Before SoftBank, Liu was an investor at Vy Capital, an early investor in Legalist.

Legalist isn't the only litigation finance firm making moves. Mighty, a NYC-based fund, raised $114 million in debt and equity last year, and Jules Kroll, the corporate investigations pioneer and father of Nick Kroll, launched a firm called BlueWhite Legal Capital with up to $150 million in funding from hedge fund Magnetar Capital.