INR 4 cr Will be Invested in Legitquest by Startup Investments (Holding)

Nitin Konde, Varun Bhardwaj

Nov 13, 2024 — 2 min read

Startup Investments to Invest INR 4 Crore in Legitquest

Through its fully owned subsidiary Startup Investments (Holdings) Ltd., the internet business Info Edge Datalabs told the stock exchanges that it intends to invest INR 4 crore ($474K) in its portfolio company LegitQuest.

By purchasing convertible notes, the investment in the legal tech business will be made in two installments. Subject to "certain conditions," the remaining INR 2 Cr will be invested within a year after the first payment of INR 2 Cr is made within 30 days. After the second investment tranche, Info Edge would own a total of 27.98% of the firm, even though it will also be obtaining more funding from other investors. This, however, is contingent upon additional provisions and LegitQuest's subsequent investment round.

About LegitQuest

LegitQuest, a generative legal AI assistant founded in 2017 by Karan Kalia, Rohit Shukla, and Himanshu Puri, offers lawyers real-time responses, document draughting, contract and case law assessments, and more.

The startup claims to have over 1,000 business-to-business clients and over 3 lakh users. After making INR 2.22 Cr in FY23, LegitQuest's turnover for FY24 increased by 163% to INR 5.85 Cr. Additionally, it recorded INR 38 lakh in profit after taxes for FY24.

In Edge Expanding its AI Portfolio

When the startup raised INR 5 crore in its Series A funding round in 2021, Info Edge made its first notable investment in LegitQuest. Waterbridge Ventures participated in the round as well.

The investment is in line with the business' growing emphasis on funding internet businesses that use GenAI. Info Edge further mentioned that this month it would spend INR 30 crore in Redstart, its investment arm. The firm intends to use this investment to look into more online business investment opportunities.

In terms of finances, Info Edge saw a sharp drop in profits during the second quarter of the current fiscal year. The company's net profit in Q2 FY25 was INR 84.73 Cr, down 64.6% year over year from NR 239.74 Cr in the same quarter the previous year. However, compared to the INR 625.84 Cr it reported in Q2 FY24, its operational revenue increased 3.5% YoY to INR 700.82 Cr.

Generative AI’s Investment Scenario in India

According to a survey by IT industry group Nasscom, investment in India's generative AI firms increased by twofold in the first half of 2024 (January–June) as compared to the second half of 2023 (July–December).

According to Nasscom's most recent Generative AI tracker, despite the rise in investments, funding rounds decreased by about 50% in the first half of this year compared to the second half of the previous year. In the same time frame, US investments in Gen AI startups increased threefold, and large tech corporations' investments in Gen AI startups increased 1.25 times.