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Carta, Private Exchange


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Private Exchange

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May 16, 2020


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Carta, Private Exchange

Published:

May 16, 2020


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There are more private technology companies today than ever before – and they are staying private longer. The aggregate value of U.S. “unicorns” is now $715b, up from $53b in 2010, and the number of publicly listed companies is down 50% today from the late 1990s.

Private companies have been forging new ways to access liquidity for their shareholders and employees. In 2019, more private companies considered a direct listing on credible public exchanges (NYSE, Nasdaq) than a traditional IPO. A direct listing allows for a company (Spotify + Slack) to sell secondary shares and achieve price discovery while avoiding the exorbitant banking fees.

The race to build a credible private exchange is heating up with no clear winner(s) yet, as incumbents and new emerging exchanges vie for relevance. Nasdaq strategically entered the market years ago, acquiring Barry Silbert’s original business SecondMarket, which claimed over 50% of all secondaries from venture-backed companies in 2019.

This week, Carta, which provides software for startups to manage their capitalization tables, announced their intentions to launch CartaX after four years of product development. Forge and SharesPost announced a merger, and together facilitated more than $6b in secondary shares of more than 320 private companies. Last year, the SEC approved the “Long-Term Stock Exchange” or the LTSE backed by a handful of venture capital firms.

With these private exchanges racing to come online and capture more than their fair share of the transaction volume, how will private companies react to their shareholders selling stakes and probably having to provide some level of performance data to support the price?

Portfolio News


Artivest acquired by iCapital Network - We are very pleased to share that portfolio company Artivest is being acquired by iCapital Network. Together, iCapital and Artivest will service more than $55b in client assets across 650 funds, and 115,000 accounts. Read more

Anyfin raises $30m Series B to let consumers refinance their existing loans - Huge congrats to portfolio company Anyfin on their $30m Series-B round from growth investor, EQT Ventures, to fuel their mission to bring fair banking to all Europeans. Read more

Colombian payment infrastructure fintech Minka raises $3m - Portfolio company Minka is bringing real-time payment infrastructure to Latin America using distributed ledger technology. We’ve been continually impressed by Dom’s ideal mix of technical prowess and commercial savviness, maintaining a push-the-boundaries, hacker culture within Minka despite serving some very large and important global banking partners. Read more

Antler & FTC co-host discussion on COVID impact in emerging markets - As global investors, we will be sharing views on the main effects of the pandemic for entrepreneurs across EM regions. Join us on May 27, 2020 at 8AM EST/8PM SGT. Read more

Redefining the internet in service to the public - Eva Arevuo from portfolio company Underline stresses the need to prioritize critical public needs while we design new solutions for access to information. Read more

Private Exchange


SharesPost and Forge Global to merge - SharesPost and Forge Global have facilitated more than 10,000 client transactions worth more than $6b in shares of more than 320 private companies, Forge Global agreed to $160m in cash and stock for the deal. Read more

Carta plans a private share trading platform to rival Nasdaq - Carta is planning to launch a private share trading platform that it hopes will be a credible alternative to leading stock exchanges. The platform has 15k companies, 900k investors, law firms, and employees registered. Read more

High-speed trader GTS to create an online market for pre-IPO shares - GTS, along with Paul Tudor Jones, announced they are launching ClearList. A key difference between ClearList and its rivals is that GTS plans to continually buy and sell shares on ClearList, much like it does on the NYSE, where GTS is a designated market maker. Read more

Industry News


Goldman Sachs to buy boutique wealth management custodian Folio - Folio would be the second wealth management company GS has acquired in two years, following United Capital in 2019. Folio has $11b in assets under custody for RIAs. Read more

PNC aims to emerge from the next financial crisis much larger - PNC’s decision to cash out roughly $14b in BlackRock shares will position the Pittsburgh-based bank to be a much more aggressive buyer than it was in 2008, when it snapped up a regional rival. Read more

Monzo faces near 40% valuation drop in latest fundraising - The bank is close to agreeing a deal that will value it at around £1.25b, compared with the more than £2b valuation secured at its most recent funding round last June. Read more

Singapore’s Temasek throws weight behind Facebook’s Libra - Singapore's Temasek, one of the world’s biggest institutional investors, has thrown its support behind the Facebook-led digital currency Libra in a development that could help breathe new life into the under-fire project. Read more

OCC floats new payments charter for Stripe, PayPal, and crypto firms - The new chief operating officer at the U.S. Office of the Comptroller of the Currency (OCC), previously the Chief Legal Officer of Coinbase, has suggested a ‘payments charter’ that would allow for federal regulation rather than state-by-state. Read more

Brit & Google Cloud launch first algorithmically driven Lloyd’s Syndicate, Ki - Brit announced plans to launch Ki, a standalone business and the first fully digital and algorithmically-driven Lloyd’s of London syndicate that will be accessible anywhere, at any time. Read more

As recession looms, Brex stockpiles cash, cuts credit - Before the coronavirus outbreak, Brex had raised $615m in equity and debt funding. Brex has about $300m on its balance sheet, according to sources familiar with the company. Read more

Jack Ma’s Open Banking strategy gets a boost from lockdown - The number of banks paying Ant to help them build mobile apps and provide cloud computing power jumped by 175% in the two months through April. Ant is now working with more than 200 lenders. Read more

38-Year-Old CEO of Korean Fintech Leader Seeks $200m - South Korea’s largest fintech startup Toss, is planning to raise about $200m from investors to bankroll its expansion in online banking and security trading services. Read more

Lessons from Plaid for health insurance digital transformation - Key takeaways from Plaid's facilitation of a digital makeover in financial services can be incorporated into the nascent digital revolution in health insurance and employee benefits. Read more

Bogotá leads South American cities on FT’s fast-growing companies ranking - Colombia contributes 31 companies to the list — as many as the rest of Latin America put together - with fintech well represented as a leading vertical. Read more

LatAm lending: NPL rates surge amid COVID-19 - COVID-19 is hurting LatAm fintech lenders’ non-performing loan rates, as well as other metrics, according to new Iupana study. Read more

Select Financings


ANNA - London based mobile-first banking and tax accounting software for SMEs raised $21m from ABHH Group. Read more

Clyde - New York based warranties-as-a-service platform raised $14m in Series A financing led by Spark Capital. Read more

FalconX - San Francisco based crypto trading service raised $17m in funding from investors including Avon Ventures, Coinbase Ventures, Lightspeed Venture Partners, Flybridge, Accel, Fenbushi, and Accomplice. Read more

Homeward - Austin, Texas homebuying lender raised $20m in equity funding led by Adams Street Partners. Read more

Modulr - London based payments-as-a-service API platform raised £18.9m in growth funding led by Highland Europe. Read more

Lolli - New York based bitcoin rewards startup raised $3m in a Seed extension round led by Founders Fund. Read more

Primer - London based enterprise payments platform raised £3.8m in Seed funding led by Balderton Capital. Read more

Validus - Singapore based SME lending platform raised $20m in a Series B extension round co-led by Vertex Growth fund and Kuok Group’s Orion Fund. Read more

Vise - New York based wealth management platform for financial advisors raised $14.5m in Series A funding led by Sequoia. Read more


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