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Carta Raises $22M from Carta, NEA, Sequoia and More for European Startups to Manage Ledzy, Equity and Cap Tables • Technology Flow

Managing cap tables and equity in high-growth companies is a complex (and sometimes messy) business, a fact that founders and employees discover too late. That’s led to a wave of companies building software to help, and today the European leader of the pack is announcing some funding to fuel its own growth. Ledzy, a Zurich-based startup that creates cap table management software specifically for companies and their employees operating in multiple countries, has raised $22 million in Series B funding, which it is using for recruiting, further product development and bringing on more customers.

The Ledgy platform today covers finance, HR, legal and VC teams as well as tools for employees and is used both to provide a snapshot of a company’s equity status at a given point in time and to help employees and companies manage what they can do. Choose to do with it over time. Today the company has 2,000 companies as customers, up from 1,500 a year ago, and revenues have doubled, CEO and co-founder Yoko Spirig said in an interview.

Significantly, its rise marks an interesting moment for European tech. We’re starting to see a lot more European startups stay in Europe and raise funds and scale rather than relocating to the US, and with that the issue of equity awards for those companies is only growing. Ledgy counts some of the largest startups in the European ecosystem among its customers, including Peak, Getir, Cree, Monies, Celina Finance, Gorillaz, Choco, Alan, Pennylane and Scalapay.

Ledzy has some impressive names on its own cap table. The round is led by New Enterprise Associates (NEA), with participation from Sequoia Capital, Speedinvest, btov, Visionaries Club and unnamed angels. Sequoia (as part of its big move into Europe) led a $10 million ledge Series A a year ago, and this latest round brings NEA partner Jonathan Golden on board with Sequoia’s Louisiana Lixandru. It has collected $33.5 million to date.

Ledgy’s sweet spot is working with companies that have employees in different jurisdictions and building a product that acts as a finance and HR tool for them.

There are many companies like Carta and more recently AngelList and Pulley (valued at $6.8 billion, $4 billion, and up to $300 million for young Pulley, respectively) continues to make waves in the US market, Ledge sees an opportunity to create cases where companies want to offer equity to international employees. Balance differences in norms and culture when doing so.

“We started in a broken Europe, which was both a curse and a blessing,” Sprigg said. “This has forced us to serve customers with international teams.”

Ledge stumbled upon it almost by accident, Spirig said.

She and her co-founders (CTO Timo Horstschaefer and CPO Ben Brandt) are working on a different startup in the security space in Zurich — “the Signal version of Slack,” is Spirig’s catchy description. They were chatting with another co-founder who showed them how he managed equity and his cap table: it was all in a spreadsheet.

“It was a huge Excel file, and each individual share took up a line,” she recalls.

Managing is “a complete nightmare,” she continued, but that’s not the only problem. Not only that A startup team beyond Switzerland, but “it The team doesn’t really understand what equity is.

Surprisingly there is no off-the-shelf product on the market to solve that triangular scenario: equity management, with tools for employees, can be used in multiple countries.

“The way we’re going about it is different from the way people historically did it with paper, then with Excel, then with software like ShareWorks,” Spirig said. “But in Europe people don’t understand the value of equity, so we want to make sure the employee experience is part of that. It’s a shift from a finance-only product to one that’s not targeting people.

That founder and his company are still customers of Ledge, Spirig said.

Today the company focuses heavily on fundamental equity and provides tools for companies and their employees to understand and manage it. It has connections with a third party, Semper, to handle secondary trades; Pave and figures to benchmark compensation; and 40 popular HR platforms used by companies to manage other forms of compensation and benefits. This opens the door to functionality and features that Ledge can choose to build on its own (or bolt on through acquisitions) in the future.

Companies like Carta will also cover services for the company’s employees, hoping to help the company grow their business further by expanding their sites. (In fact, Carta bought UK competitor Capdesk earlier this year, which is also building equity management for European companies, so we’ll have to watch this space. As Spirig pointed out when I mentioned Capdesk to her, it’s based in Europe, yes, but it’s in multiple international jurisdictions simultaneously. (Not addressing the challenge of managing equity for its customers.)

“Through my lens as an investor at NEA, combined with my past experience at category-defining companies like Airbnb, Dropbox and Hubspot, I see that ownership plays a central role in building lasting companies,” said Golden at NEA in a statement. “The challenge of equity management is particularly acute in Europe, where each country has different legal structures governing equity. Ledgy has created a smart and powerful equity software platform and built an excellent, best-in-class team to support it. Yoko, Ben and Timo understand the challenges companies face and understand equity and ownership. We are thrilled to partner with the Ledzy team as they continue to reinvent how companies think about business.

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