March 30, 2023

Managing cap tables and equity in high-growth companies can be a complicated (and sometimes messy) business, a fact that founders and employees often discover too late. That’s spawned a wave of software companies to help, and today a European leader in that pack is announcing some funding for its own growth. LazyA Zurich startup that makes cap table management software specifically for companies operating in multiple countries and their employees has raised $22 million, a Series B that it is using to recruit, develop more products and bring on more users.

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

Significantly, its rise coincided with an interesting moment for European technology. We are seeing more European startups choose to stay in Europe to raise funding and scale rather than transplant to the US as they would have been expected to do in the past, as well as the issue of equity awards for those companies. The workforce is only growing. Lazy counts some of the biggest startups in the European ecosystem among its customers, including Peak, Getty, Cree, Monis, Celina Finance, Gorillaz, Choco, Allan, Pennylane and Scallop.

Lazy itself has some impressive names on its own cap table. The round is being led by New Enterprise Associates (NEA), with Sequoia Capital, SpeedInvest, BTOV, Visionaries Club and unnamed angels also participating. Sequoia led Ledgy’s $10 million Series A round a year ago (as part of its much larger move into Europe), and in this latest round NEA partner Jonathan Golden is joining Sequoia’s Luciana Lixandru on the board. It has raised $33.5 million to date.

Lazy’s sweet spot is working with companies located in different jurisdictions and developing a product for them that serves as both a finance and HR tool.

Although companies like Carta, and more recently AngelList and pulley (valued at $6.8 billion, $4 billion, and up to $300 million for smaller pools, respectively) continue to make waves in the US market, Lazy sees an opportunity to create situations where companies want to provide equity to international workers and need to do so while doing so across regulatory and cultural differences. Maintain balance.

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

Lazy stumbled into it almost by accident, Spirig said.

He and his co-founders (CTO Timo Horstscheffer and CPO Ben Brandt) were working on a different startup in Zurich in the security space — “a signal version of Slack,” was Spierig’s catchy description. They were chatting with another co-founder who showed them how he was managing equity and his cap table: it was in a spreadsheet.

“It was a huge Excel file,” he recalls, “and every single share took up a single line.”

Managing it “was an absolute nightmare,” he continued, but that wasn’t the only problem. That’s not it The startup’s team was based out of Switzerland, but “it The team didn’t really understand what equity was.”

Surprisingly there was no off-the-shelf product on the market to address that triangular situation: equity management, including tools for employees, could be used in multiple countries.

“The way we approach it is different than historically people handled it with paper, then Excel, then software like ShareWorks,” Spirig said. “But in Europe people weren’t understanding the value of equity, so we wanted to make sure the employee experience was part of that. It’s a switch from a money-only product to one that’s not meant for people.”

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

Companies today focus heavily on early equity and providing companies and their employees with the tools to understand and manage it. This includes integration with a third party to conduct secondary trades, Semper; Benchmark compensation is broad and statistical; And about 40 popular HR platforms are used by companies to manage other types of compensation and benefits. It also opens the door to functionality and features that Lazy might choose to build itself in the future (or bolt on via acquisition).

The fact that the company also covers services for employees itself is something it hopes will help it keep a moat around its business as companies like Carta expand their sites farther afield. (Actually, Carta Acquired a UK competitor, Capdesk, earlier this year, which is developing equity management for European companies, so we have to watch this space. As Spirig pointed out when I told him about CapDesk, it’s present in Europe, yes, but it’s not simultaneously tackling the challenge of managing equity for its clients across multiple international jurisdictions.)

“Through my lens as an investor at NEA, combined with my past experience at category-defining companies like Airbnb, Dropbox and HubSpot, I see the central role that companies play in creating lasting companies,” Golden said in a statement at NEA. “The equity management challenge is particularly acute in Europe, with different legal frameworks governing equity in each country. Ledgy has built a smart and powerful equity software platform and built an incredible, best-in-class team to support it. Yoko, Ben and Timo understand the challenges companies face as they scale, and we’re thrilled to partner with the Lazy team as they continue to reinvent how companies think about equity and ownership.”

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