A Q+A with Qanlex Co-Founder Yago Zavalia Gahan
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by Dorian Salinas  Yago Zavalia Gahan (MBA 2021) had just begun his career in litigation finance when he noticed that the industry had not yet flourished in Latin America. Litigation finance—an industry that has been present in the US, UK, and Australia since the 90s —provides funding to lawsuit plaintiffs who lack economic resources in exchange for a small share of their proceeds. By providing these funds, litigation finance can help plaintiffs move forward with their case without having to worry about capital, especially when they are up against parties who have access to higher financial assets. Zavalia Gahan co-founded Qanlex, a litigation finance firm that, although based in the US, is helping level the playing field across Latin America and other parts of the world. We sat down with Zavalia Gahan to discuss Qanlex, his HBS entrepreneurial journey, and his goals for his company. How did Qanlex come about? Zavalia Gahan: My co-founder is a lawyer with an MS in applied economics. These academic interests merge together in litigation finance, where the main insight is that every meritorious legal claim is a financial asset. In a traditional sense, litigation finance requires large commercial and legal teams to source and analyze lawsuits. So, we decided to create a system that could help us make litigation finance scalable. Being an engineer and a programmer, this is where I came in. We developed a software called Case Miner, which is our sourcing algorithm that screens through judiciary databases, and reads through the documentation of every lawsuit, parametrizing it. Using machine learning models, it ranks them and automatically contacts the lawsuits that it deems most attractive. This allows us to go through millions of lawsuits without having to get our legal team involved until the plaintiff shows interest in our outreach request. Since the development of Case Miner, our team of six has screened over five million cases. This would have been impossible in a traditional model. Ideally the justice system should be impartial to economic resources, but the reality is far from it. Having to access the justice system to right a wrong can be extremely expensive, thus benefiting parties with deeper pockets. Qanlex is here to prevent capital from being an impediment in the access to justice. Where does Qanlex operate? Zavalia Gahan: Litigation finance is still considered a new phenomenon. To this day it’s still almost non-existent in continental law regions like Latin America and continental Europe. The extraordinary returns it had in the last couple of years caused its current markets to saturate with capital flowing to it. That is why even though we are US based, we operate in these new regions where the market is still highly inefficient, and focus our presence in Latin America. Being the first movers into such a big market waiting for financing is crucial to us. Litigation finance in Latin America allows us to invest at high returns, but since the payoff is not correlated with the market (no crisis influences a judge’s decision on what’s fair), we also get low risk through diversification. Where would you like to see Qanlex five years from now? Zavalia Gahan: Five years from now, Qanlex will be synonymous to litigation finance. I would like to see us as the leading providers of litigation finance in Europe and Latin America, and one of the main providers worldwide. By that time, we know competitors will arise, so that’s why we are investing in having the best data available, and the most advanced machine learning models to process and predict case outcomes. How did HBS help you in your entrepreneurial journey? Zavalia Gahan: I was a Rock Summer Fellow, so right from the beginning HBS supported me with Qanlex. The amount of HBS resources and people who are willing to help is simply overwhelming. From specialized classes, to professors, the support of other students, and the entire Harvard network, it is an amazing support system that I relied on. Being from Argentina, most of my networks are not in the US, so having all of this support far away from home was especially important and helpful to me. What advice do you have for aspiring entrepreneurs? Zavalia Gahan: Take the jump. I would also remind them that this is a game of outliers. Being a solid seven at every meeting will get you nowhere. You have a better chance of being funded if most people think you are crazy or wrong, but only a few think you are right. |
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