Exclusive: a16z-backed Carta set to enter India with ZenEquity’s acquisition

Employee stock option management platform ZenEquity is in late-stage talks with San Francisco-based Carta for a potential acquisition, according to three people aware of the development.

Carta is one of the top players in this space which was valued at $7.4 billion during a $500 million round led by Silver Lake in August last year. The company helps startups manage the financial tasks involved in raising funding. It also counts Andreessen Horowitz (a16z), Lightspeed Venture Partners, Goldman Sachs, Tiger Global, Thrive Capital Menlo Ventures among others as its investors.

“Carta has been planning to enter India and they evaluated a few companies before finalising ZenEquity,” said one of the sources requesting anonymity. “The deal is almost final and if nothing changes at the last moment - the transaction is likely to materialise soon.”

Led by Sharat Khurana, three year old ZenEquity is purely bootstrapped and lets companies manage employee stock pools through cloud based solutions. Meanwhile, employees can use the tool to manage and track their portfolios. Its key features include stock options exercising, e-Signatures, stock split, bulk upload transactions among others.

ZenEquity’s solutions are being used by more than 25,000 employees and over 200 companies including Zomato, CRED, InMobi, Razorpay, Urban Company, Meesho and Oyo. 

“Carta sees India as a large opportunity and with ZenEquity it can create a formidable presence not only in the ESOP management space but also in managing captable, valuation and investments,” said a second source who also preferred not to be named. 

Queries sent to Carta and ZenEquity founder remained unanswered until publication of the story.

At present, a clutch of companies including Singapore-headquartered Qapita, LetsVenture’s trica Equity, Figure, Ledgy and Verta are operating in the ESOP management space. The ESOP management segment is poised to grow at a rapid clip in the coming years and this could be noticed from the quantum of ESOP buyback and ESOP pool expansions executed in the past year and a half. According to Fintrackr’s data, Indian startups have bought back more than $615 million worth ESOPs held by their employees since January 2021.