A virtual arbitration startup wants to disrupt the multi-billion-dollar business of settling disputes, and just nabbed seed funding from VC Tim Draper

  • Jur, a virtual arbitration platform, has received $1 million in funding from Draper Associates.
  • The startup focuses on commercial disputes between small- to medium-sized businesses.
  • In an exclusive interview with Insider, Jur’s CEO and founder talked about his visions for growth.
  • See more stories on Insider’s business page.

Jur, a virtual arbitration platform for commercial disputes, just snapped up $1 million in seed investment from Draper Associates, the VC titan Tim Draper’s seed-stage firm, fueling up on capital as it readies itself for a public beta launch this summer.

Billionaire venture capitalist Tim Draper is known for making early bets on companies like Twitter, Skype, and DocuSign. “Jur’s digital courts are the future of decentralized justice,” Draper said.

More than 9,500 arbitration claims — worth approximately $18 billion — were filed in the US in 2020, according to the American Arbitration Association. Jur seeks to disrupt this multibillion-dollar industry by taking the arbitration process out of the public court system, offering users a streamlined way to resolve commercial disputes online.

Jur targets civil and commercial disputes between $5,000 to $1.5 million, and claims that cases take one to three months to resolve on its platform. That’s approximately ten times faster than public courts, where it can take an average of 600 days to settle a small contract dispute, according to Alessandro Palombo, CEO and founder of Jur. The time saved translates to 30 to 50% in cost savings for parties.

“Arbitration today isn’t accessible for most of the world, because it’s typically used for larger-volume disputes beyond $1.5 million,” Palombo told Insider.

Jur also standardizes arbitration settlements so that they’re enforceable across 168 signatory countries of the United Nations’ New York Convention, one of the key instruments in international arbitration.

“The legal system is designed to be very geographically bound,” said Colin Rule, a conflict resolution expert who previously founded an online dispute resolution platform. “There’s now a flowering of innovation that prompts the question: How can technology expand the justice system?”

Initial skepticism toward online arbitration

Online dispute resolution (ODR) is part of the larger umbrella of alternative dispute resolution, which includes the various methods of resolving disputes outside of court, such as arbitration, mediation, and negotiations. Business and employment contracts often include arbitration clauses that require parties to handle disputes between themselves, without filing a formal complaint in a public court.

ODR isn’t a new phenomenon — it dates back to the internet boom of the 1990s. ODR skeptics worry about the process’ fairness, access, and confidentiality. But businesses have become more comfortable with ODR over the last two decades, with companies like eBay establishing an online resolution center that now handles over 60 million disputes every year.

“We’ve humanized technology,” said Rule. “It’s no longer seen as forcing people to put their disputes into forms.” 

That said, online solutions like Jur may be better suited for transactional, business disputes focused on money, rather than more emotional disputes involving family or employment. “You have to fit the form to the fuss,” Rule said.

Jur’s platform manages the end-to-end arbitration process, from filing the initial claim and managing documents to appointing an arbitrator and facilitating the online hearing itself. An algorithm selects the decision-maker from a list of vetted judges, lawyers, and other experts, matching their expertise and experience against the type and size of the claim, said Palombo.

Normally, the parties mutually agree on the arbitrator for their case. “Fairness is based on mutual, contractual agreement in arbitration,” said Lela Love, a professor and director of the Kukin Program for Conflict Resolution at Benjamin N. Cardozo School of Law. “It also needs to be a truly neutral mechanism that isn’t swayed by gender, geography, or race, like in jury selection.”

Jur’s randomized selection process ensures a higher degree of impartiality and neutrality, according to Palombo.

Palombo acknowledged that it may take time to build up people’s trust toward a service like Jur’s. He said that in addition to bolstering security by encrypting any data uploaded onto its platform, Jur is working on creating a blind review process to ensure the arbitration awards issued at the end of the process are fair.

Building the ‘Tesla of justice’

Jur released its private beta on March 31, and will be launching its public beta in the summer. Palombo said the startup plans to use its fresh $1 million investment from Draper Associates to expand its tech and customer success teams to scale its product. The company also recently made some key senior hires, including a new chief operating officer and chief product officer.

Palombo described the difference between the traditional ODR process and Jur’s near-global online platform like the difference between a Toyota hybrid car and a Tesla. Unlike hybrid cars, Teslas were designed from the ground-up to be electric, said Palombo. While older ODR platforms still rely on offline document management or scheduling, Jur was built to be entirely digital — from start to finish. 

“We want to build the Tesla of justice,” said Palombo.

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