ESOP And Captable Management SaaS Qapita Raises $15 Mn In Series A Funding

Singapore and Hyderabad-based Equity management SaaS startup Qapita has raised $15 Mn in Series A round. The funding round was co-led by East Ventures and Vulcan Capital.

NYCA and other existing investors including MassMutual Ventures, Endiya Partners also participated in the round among others. Alto Partners, Partners of the Northstar Group, K3 Ventures, Mission Holdings, Avaana Capital’s Anjali Bansal and Sujeet Kumar Udaan’s Sujeet Kumar also participated in this round of funding.

Founded by Ravi Ravulaparthi, Lakshman Gupta and Vamsee Mohan in 2019, Qapita is a fintech and legaltech startup that provides digital equity management software for private companies, and startups in particular. 

It offers services including captable management and employee stock ownership management. The startup will use the funds raised to add more software products like liquidity solutions and a digital marketplace for private securities. 

In April this year, Qapita had raised $5 Mn in Pre-Series A round. Including the new round, the total funds raised by the startup stands at $22.25 Mn. 

Some of Qapita’s global competitors include Carta, a San Francisco-based equity management platform and Pulley, another San Francisco-based cap table management tool. 

It also has domestic competitors like LetsVenture, a Bengaluru-based fundraising platform that rolled out an ESOP management tool for startups early last year. The tool — MyStartupEquity allows startup founders and employees to manage their employee stock ownership plans (ESOP). 

In 1985, Western India Palm Refined Oil Limited was one of the first modern Indian corporations to offer ESOPs to its employees. You would recognise the company better as Wipro Ltd.

Infosys, another Indian tech giant, is famous for having given over $10 Bn in company stock options for its employees. 

Qapita’s fundraising comes as many startups are looking towards ESOPs as a tool to attract and retain talent, and build wealth. Startups like Flipkart, Unacademy, Zerodha and Razorpay have initiated ESOP buybacks to invigorate the faith of employees in company stock options.

The pandemic has accelerated this ESOP buyback phenomenon into a marathon among many Indian startups. Back in 2018, hundreds of Flipkart employees became millionaires after Walmart’s acquisition of the Indian ecommerce platform. 

Qapita will be hoping to tap into this newly invigorated interest in ESOPs among Indian startups looking to build great teams. 

In terms of expansion, the ESOP and captable management startup plans to scale talent across India, Indonesia and Singapore in the near future.

According to the company, the value of private securities in this region will exceed $1.0 Tn – 1.5 Tn and more that $150 Bn of equity will need liquidity solutions.