Fundamentals Matter, But Baker Street Funding Looks Like a GoToFunder Anyway

This is my first time writing about Baker Street Funding since the company’s inception in 2018. Based on research, I believe that Baker Street Funding is performing well, and I am here to tell you what I found.

Fundamentals Matter

With a legal funding company that has been growing its revenue as impressively since they first started, it’s fair for investors to cast doubt at where all that revenue is going. In fairness, the company attributes about $50 million a year to plaintiff and attorney funding. But will Baker Street Funding become more profitable?

Baker Street Funding has recently been working with investors and is getting media and hedge fund attention, which may give them a bank charter. This will allow them to move away from its current practice of brokering the deals they cannot close to third parties (while using their own investors to close most deals), leading them to negotiate even further down on their rates with some of the most lucrative law firms of their choice.

In return, the people these law firms represent could end up paying rates as high as what a bank loan would charge than what they would with other companies that refuse or are not allowed to provide fixed rates. This can be a step toward becoming a more profitable company, and with that comes more clientele. Playing it cool with upcoming industry regulations in the years ahead is key to what a legal funding company should do to become more profitable while protecting consumers ahead of time.

Competition Is Increasing

There is an issue. Many investors looking to take over the industry for its profit are reacting to how legal funding companies are dealing with the competition. Baker Street Funding’s acknowledgment that competition is increasing is that with that comes extra investment in offline marketing. With many start-ups looking for the quick buck and failing within the industry due to the well-capitalized competition, the company has a moat, so they are easy to classify as a business protecting its long-term profits against the competition.

The Reality

On the one hand, let’s be realistic because fundamentals matter. After all, if a company has all that capital behind, clients can come back for more funding even if it is in the seven digits. Baker Street Funding should continue to plan ahead to contribute to government regulations; this way, they will be known as one of the few legal funding companies that protect their consumers.

However, when it comes to investors, they should pay attention to how Baker Street Funding is planning on allocating their capital when it comes to offline marketing. They are a private company, and unlike many small failing companies in the industry, they have to plan it carefully.

According to my research, it has not been a smooth ride forward since their inception, but they continue to grow. In the long-term, it looks like Baker Street Funding is starting to lead the legal funding industry, but a $300 million investment a year with some very strategic marketing plans to overpass the commercial litigation side of the industry against some of the other giants is what will take for them to multiply their profit.