Carta is trying to build Nasdaq for private markets. It’s now worth $6.9B.

Carta started by helping startups manage cap tables. Now, it wants to build the world’s largest private market exchange.

Some of the best startups have the simplest ideas.

Carta is trying to build Nasdaq for private markets. It’s now worth $6.9B.

Carta is one of them: Founded in 2012, the startup creates software for other startups to manage their equity cap tables that keep tracks of investors (and what % of the company they own).

Recent trading of Carta’s private stock values it at $6.9B, up from $3B less than a year ago, per The Information.

18k+ customers use the software…

… and Carta projects revenue over the next 12 months to be $150m, up 2x from the year before.

By centralizing employee and shareholder information in one place, Carta is in prime position to build out a “Nasdaq-type stock exchange” for private markets (AKA secondary markets).

In doing so, it’s competing with some big fish in the space, including Morgan Stanley (Shareworks) and the actual Nasdaq (Nasdaq Private Market).

Carta’s offering is called CartaX

And the startup’s $6.9B valuation comes from recent trading of its own shares on the private market exchange. In a blog post, Carta’s founder and CEO Henry Ward explains what he learned from the deal:

  • Better prices: Private shares are typically sold in tender offers, which are noncompetitive. CartaX allows more buyers to participate, which bids up employee equity.
  • Liquidity for employees: As startups stay private longer, CartaX is a way to let employees cash out a portion of their equity along the way, rather than hoping for a big payout.
  • Saves time: Instead of time-consuming fundraising, startup CEOs and CFOs can quickly tap liquidity from institutional investors and high net-worth individuals on the platform.

CartaX — which takes a 2% cut from each trade — creates a true alternative to public markets.

Simple idea. Huge opportunity.

Topics: Finance Startup

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