Carta, an equity management platform that was last privately valued at $7.4 billion has backed Raise in an undisclosed deal. It is the US-based companies first African investment.
Like Carta, Raise organises ownership data for African companies and makes them accessible, the company is active in Nigeria and Kenya.
"Since the Carta strategy team joined our cap table, we have been working really closely with them to understand how to bring the best customer experiences to African tech," Marvin Coleby, co-founder and CEO of Raise, said. "Everything we’ve learned from Carta, we’ve built into our core product offerings that are shipping now and (accelerating) over the next few months. All of these upgrades to product and customer journeys are designed to take African startups from launch to liquidity, faster, and with clean cap tables."
The US based company has also made acquisitions and investments into similar ownership products in strategic markets across the world, including Europe, Asia, India and Latin America, and now Africa.
Launched in 2019, Raise was in private beta and was backed by Binance Labs, the sole investor in its pre-seed round. The following year, the company moved into public beta and has onboarded customers like Anjarwalla & Khanna, Africa’s largest law firm; startups Appruve, Bamboo, Workpay and Mono; and VC firms like Microtraction and Chrysalis Capital.
The number of companies onboarding on the platform is increasing 60% month-on-month, according to Coleby. Raise manages more than 200 cap tables with assets worth more than $400 million
In 2021, Raise reportedly received the backing of 500 Startups to scale its technology.
"Everything we do is to find a way to make it easier for founders, customers, employees, investors to get liquidity from investing in companies," Coleby told TechCrunch. "Companies are raising money, people are investing, and employees are getting stock options. However, there are only one or two exits now and then. That’s because we build with the Silicon Valley model where we have to grow, scale until we get some big exit. From our perspective, liquidity doesn’t have to be that way. It can be small little pieces of liquidity that employees and investors get over time."
Carta's partnership and investment in Raise has been described as an important signal of their dedication to building a global private stock exchange with integrations into Africa’s economy.
"Private markets are fundamental to financial independence. Economic independence is critical for countries and societies across the continent. Private markets are fundamental to Africa’s growth," Raise said in a statement.
In the coming months, the company disclosed that its users should expect:
- "Liquidity products and experiments with African currency settlements (secondaries, stock option financing)
- Syncing with syndicate platforms across the ecosystem to invest directly into equity structures and cap tables
- Integrated market data from the tech ecosystem (like Pariti’s salary benchmark, Big Deal and Briter data) for better benchmarks for equity valuations across the world, like compensation, preferred share ownership and valuations across multiple markets
- Relaunching electronic shares product so that we can all hold equity in African tech companies in the palms of our hands (and on-chain)
- Leveraging Carta’s API and the open cap table standard we’re all building to provide world-class ownership, equity and security experiences for your teams and shareholders
- Existing Carta customers and shareholders are able to sync their holdings directly to Raise, and run health checks against African law and macroeconomic trends."
The impact of Mercury Bank kerfuffle and the recent collpase of Silicon Valley Bank describes the over dependence of the African tech ecosystem on American securities law and capital markets, Raise intends to use its partnership with Carta to leverage "Americas experience to strengthen the foundations of African tech".
Editor's Note: This is a developing story