- Carta, a platform that allows users to buy, sell, and trade privately held assets, announced Monday it closed $US300 million in Series E funding that valued the company at $US1.7 billion.
- Andreessen Horowitz led the round and Marc Andreessen will join the company’s board.
- Lightspeed Venture Partners, Goldman Sachs Principal Strategic Investments, Tiger Global and Thrive Capital joined the round as their first investment in the company.
- Carta most recently raised $US80 million in December at $US800 million valuation.
- Founder and CEO Henry Ward told Business Insider that the influx of funds will help the company “blur the lines” between public and private investment assets and expand its presence in traditional capital markets.
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Carta, a service for buying and selling shares in private companies, has built its business around the surging valuations of startups.
On Monday, Carta provided a first-hand example of the trend when it announced that its own valuation has jumped by nearly $US1 billion in the span of just five months.
The company announced it has closed $US300 million in Series E funding tied to a $US1.7 billion valuation. Andreessen Horowitz led the round and Marc Andreessen will join the company’s board to help Carta move beyond business-to-business asset management.
Carta most recently raised $US80 million in Series D funds in December that valued the company at $US800 million. With Monday’s announcement, the company has raised a total of $US447.8 million.
“We are building, growing quickly and growth is expensive,” Carta founder and CEO Henry Ward told Business Insider. “We’re building a new financial infrastructure, and that is expensive.”
Carta helps employees and investors sell stake in privately-held companies through their online equity management platform, formerly known as eShares.
Ward said the new funds will help the company build out CartaX, what is essentially a stock market for private assets like shares in a private company. He said the company wanted to bring on investors with experience in capital markets to help build the company’s New York presence. Lightspeed Venture Partners, Goldman Sachs Principal Strategic Investments, Tiger Global and Thrive Capital joined Monday’s round as their first investment in the company.
“Since the railroads, there’s been no liquidity in the private world,” Ward said. “A lot of people are trying to solve that problem and we might be the first company that gets to crack the code.”
“My mum can’t even invest in my company”
Ward sees Carta’s growth coming predominantly from CartaX as more companies stay private longer and fewer Americans have equitable access to investment assets.
“My mum can’t even invest in my company,” Ward said. “Our goal is to create a private stock market where we will build democratized access to investments and private assets.”
Carta began by offering a fund administration tool for investors in 2018, which Ward said is projected to comprise 20% of Carta’s overall revenue by the end of 2019 as the company’s fastest growing product line. According to Carta, fund administration counts over $US9 billion in assets under management with a $US5 million annual run rate.
According to Ward, Carta serves about 25% of the venture market, and adds 10 to 15 firms to its fund management tool a month. He says part of the appeal for venture-backed companies is Carta’s ability to help them prepare to go public.
“When you look ahead, the IPOs in 2023 are the Series B companies on Carta today,” Ward said. “The lines between private and public [markets] will blur over the next few years, and we are building the structure to allow those lines to blur.”
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