Managing cap and equity tables at high-growth companies can be a tricky (and sometimes tricky) business, a fact that founders and employees often discover too late. That has spawned a wave of companies creating software to help, and today a European leader in that group is announcing some funding to fuel its own growth. Ledgya Zurich startup that builds capitalization table management software specifically for companies and their employees working in multiple countries, has raised $22 million, a Series B that it’s using to recruit, develop more products and attract more users.
Currently, Ledgy’s platform covers tools for finance, HR, and HR teams. choose to do with it over time. The company now has some 2,500 business clients, up from 1,500 last year, and revenue has tripled, CEO and co-founder Yoko Spirig said in an interview.
Significantly, his rise dovetails with an interesting time for European technology. We are starting to see a lot more European startups choosing to stay in Europe to raise funds and scale rather than transplant to the US. Employees are only growing. Ledgy counts among its clients some of the largest startups in the European ecosystem, including Peak, Getir, Kry, Monese, Selina Finance, Gorillas, Choco, Alan, Pennylane and Scalapay.
Ledgy has some impressive names on his own cap table. This round is led by New Enterprise Associates (NEA), with participation from Sequoia Capital, Speedinvest, btov, Visionaries Club and anonymous angels. Sequoia (as part of their much larger move into Europe) led Ledgy’s $10 million Series A a year ago, and with this latest round, NEA partner Jonathan Golden joins Luciana Lixandru de Sequioa on the board. She has now raised $33.5 million to date.
Ledgy’s sweet spot is to work with companies that have employees located in different jurisdictions and create a product for them that acts as a financial and HR tool.
While a number of companies such as Letterand more recently AngelList Y Pulley (valued at $6.8 billion, $4 billion and up to $300 million for the youngest Pulley, respectively) continue to make waves in the US market, balancing differences in regulations and culture in doing so.
“We started in a fragmented Europe, which was a curse and a blessing,” Spirig said. “He forced us to serve customers with international teams.”
Ledgy stumbled upon this almost by accident, Spirig said.
She and her co-founders (CTO Timo Horstschaefer and CPO Ben Brandt) were working on a different startup in Zurich, in the security area: “a Signal version of Slack,” was Spirig’s catchy description. They were chatting with another co-founder who showed them how he manages capital and his cap table – it was all in a spreadsheet.
“It was a huge Excel file,” he recalled, “and each share was on a single line.”
Managing that “was a complete nightmare,” he continued, but that wasn’t the only problem. Not only was the startup team located beyond Switzerland, but “that The team didn’t really understand what fairness was all about.”
Surprisingly, there was no off-the-shelf product on the market to address that triangulated scenario: wealth management, with tools for employees, capable of being used in multiple countries.
“The way we approach this is different in that historically people used to manage with paper, then Excel, then software like Shareworks,” Spirig said. “But in Europe people didn’t understand the value of fairness, so we wanted to make sure the employee experience was part of it. It is a change from being a finance-only product to one that is not aimed at people as well.”
That founder and his company remain Ledgy customers, Spirig said.
Today, the company is very focused on primary capital and provides tools for companies and their employees to understand and manage it. This includes integrations with a third party, Semper, to manage secondary transactions; Pave and Figures for benchmark compensation; and some 40 popular HR platforms used by companies to manage other types of compensation and benefits. That also opens the door to functionality and features that Ledgy may choose to build on (or add through acquisitions) in the future.
The fact that the company also covers services for the employees themselves is the kind of thing he hopes will help him maintain a moat around his business, as companies like Carta expand their sites further afield. (Indeed, Letter acquired a UK competitor, Capdesk, earlier this year, which has also been building money management for European companies, so we’ll have to keep an eye on this space. As Spirig pointed out when I mentioned Capdesk to him, it has a presence in Europe, yes, but it’s not tackling the challenge of managing its clients’ capital in multiple international jurisdictions simultaneously).
“Through my lens as an investor at NEA, combined with my prior experience at category-defining companies like Airbnb, Dropbox and Hubspot, I have seen the central role ownership plays in building lasting businesses,” Golden said at NEA in a statement. “The share management challenge is especially acute in Europe, with different legal structures governing shares in each country. Ledgy has built a smart and powerful stock software platform and built an amazing, best-in-class team to back it up. Yoko, Ben and Timo understand the challenges companies face as they grow, and we are thrilled to be partnering with the team at Ledgy as they continue to reinvent the way companies think about capital and ownership.”
Updated with up-to-date customer and revenue growth numbers.