Singapore-based digital equity management startup Qapita Fintech, said Wednesday it has raised an undisclosed round of funding from East Ventures. The fresh funding will be used to accelerate product development, build clientele, and further strengthen its team in Singapore, India, and Indonesia.
Last year in September, Qapita raised USD 1.8 million in a seed round led by Vulcan Capital, an investment institute founded by Microsoft co-founder Paul Allen, with participation from early-stage investors including Koh Boon Hwee, K3 Ventures, and partners of the NorthStar Group.
Founded in 2019 by the alumni of India’s esteemed engineering and management institutes including Indian Institute of Management (IIM) Bangalore and Indian Institute of Technology (IIT) Chennai, Ravi Ravulaparthi, Lakshman Gupta, and Vamsee Mohan, Qapita helps private companies and startups manage capitalization tables, employee stock ownership plans (ESOPs), and digitize issuance of equity awards and shares.
The founders have decades of experience in investment banking, corporate finance, and software engineering respectively, and have worked across markets like India, Singapore, Indonesia, Malaysia, and Hong Kong. The company has offices in Singapore and Hyderabad in India.
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“We believe that there will be no paper-based shares and share certificates for startups in this region in the years to come. Digitization is relentless and we think security issuance and securities themselves will become electronic. Qapita is also building digital share issuance capabilities on the platform and will work with partners in the company secretarial and legal sector,” said Lakshman Gupta, COO, Qapita Fintech.
As startup ecosystems in India and Southeast Asia are showing signs of maturity with a handful of startups offering their employees an option to cash out their ESOP holdings, equity management startups have mushroomed in the region.
Bengaluru-based LetsVenture that enables startups to raise early-stage investments from venture capital firms launched MyStartupEquity in January last year. Similarly, in June, US-based AngelList rolled out Equity List, its ESOP management platform for Indian startups and their employees to track their equity holdings.
Last year startups such as food delivery majors Swiggy and Zomato, fintech platform Zerodha, social commerce company Meesho, edtech startup Unacademy offered their employees to encash their ESOPs in the company.
Nitin Sharma, co-lead and partner at Singapore-based global VC firm Antler said although the quantum of ESOP buyouts is comparatively small compares to the US, it’s great for employee morale and creates a positive cycle for the startup ecosystem.
“We have had a culture of risk aversion in India and when people see monetary value being created for employees this sends out the message that these risks (working in a startup) are worth taking,” Sharma told KrASIA.
According to him, this is also a very good way to ensure these startups attract and retain the best talent in the industry. “Founders are becoming serious about sharing the wealth creation with employees and boost the morale of employees to stay longer in the company.”