- Carta (originally called eShares) provides a host of equity management products for startup companies from the distribution of stock-option grants to 409A valuations.
- On Thursday, Carta confirmed it has raised an $US80 million Series D funding round – led by Meritech and Tribe Capital – to help expand its product suite even further.
- Business Insider first reported rumours of the deal in early December.
- The latest round puts Carta’s valuation at $US800 million.
Henry Ward can’t stop thinking about a question he was asked by an investor years ago: Why is it that when he wants to buy General Electric stock it’s done online in just a couple clicks, but when he invests in two founders in a garage, he gets a paper stock certificate in the mail that takes months to receive?
The backward world of early-stage investment and stock option grants is what Ward, the CEO and co-founder of Carta (known initially as eShares), set out to change in 2012.
Today, Carta provides not only provides electronic securities for employees and investors, but a host of equity management products for private, venture-backed companies.
On Thursday, Carta confirmed it has raised an $US80 million Series D funding round – led by Meritech and Tribe Capital – to help expand its product suite even further.
Business Insider first reported rumours of the deal in early December.
“I don’t know what an inverse of an onion is, but it’s like, the more problems we solve, the more problems we get to solve,” Ward told Business Insider in a recent interview. “It’s like every layer we peel open, we find more gold underneath, so the vision keeps expanding.”
The latest round puts Carta’s valuation at $US800 million.
It started with e-shares
When the company started in 2012, it had a different name and a simpler product.
eShares (as it was called) issued electronic stock certificates to employees and investors of privately held companies so that paper stock grants didn’t have to be used. The company rebranded to Carta in 2017 as its product offering outgrew the name.
Carta now offers products like cap table software for startups to better manage the distribution of their equity and 409A valuations for privately held companies to understand how much their shares are worth.
Ward tells us that Carta’s competitors today are mostly people and spreadsheets.
With the latest injection of funding, Carta will expand its offering even further, building out tools for startups to streamline the stock-option process all the way from the inception of a company to IPO and beyond. Carta plans to launch additional products on the investor side as well.
But for the ambitious CEO – who says he always wanted to be involved in a financial infrastructure company, but wasn’t very good “culture fit” at investment banks – the dream is still much larger.
“In the public world there’s so much liquidity. In private world there’s zero,” Ward explained. “It’s hard to think of examples where there’s such an arbitrarily line, where a world that does exactly the same thing functions so differently.”
Over time, Carta hopes to reimagine what it means to hold shares in a privately-held company for both employees and investors – making the buying and selling of stock on a secondary market much more fluid than it is today.
“There are no great companies today that are tackling capital markets, that are truly taking on Wall Street financial infrastructure,” Ward tells us. “We are going to be that company.”
Business Insider Emails & Alerts
Site highlights each day to your inbox.