US fintech unicorn Carta is well and truly on an acquisition spree.
The company, which sells software to help funds manage administration and startups manage their ownership, bought two companies in the UK this year. It purchased UK competitor Capdesk and Vauban, both for undisclosed amounts.
“I’ve done five trips to London this year and we’re not going to stop thinking about M&A,” Carta’s CEO Henry Ward tells Sifted in an interview at Web Summit in Lisbon.
“There’s a lot of cool things going on, both in the UK and continental Europe.”
Investors say it's not the only well-financed US company likely looking at European targets for growth in coming months given the strength of the US currency. The dollar is up over 15% against both the British pound and the euro to date this year.
Every other market we’re entering through M&A, so you’re going to be hearing more acquisition announcements soon
The only place in the world Carta intends to grow organically — by hiring its own people on the ground — is Singapore, the US CEO explains.
“Every other market we’re entering through M&A, so you’re going to be hearing more acquisition announcements soon,” he says.
Who’s on Carta’s shopping list?
Ward won’t share when or where within Europe these will be, but he says that “any company that’s doing what we’re doing in the US, but in Europe, is a target”.
He adds that Americans “don’t get international markets well”, so the company would rather convince similar startups to come and join Carta than try to figure out local regulatory and cultural nuances itself.
So, what exactly is Carta doing?
Ward says that 60% of its revenues come from helping founders of high-growth companies to manage their cap tables — that details who has ownership of a company — as they scale. Another 30% of revenues come from fund administration for venture funds. The other 10% comes from its newer products like tax advisory and compensation management.
Here’s a list of the European companies that come under that umbrella — and could be on Carta’s shopping list:
- Berlin’s private markets investing platform Bunch, which raised a €7.3m seed in July;
- Swiss equity management platform Ledgy, which raised a $22m Series B in September;
- Frankfurt’s equity management platform Portagon;
- London’s employee equity access platform Semper.
Vauban and Carta in the bag
But Ward says that the benefits of these acquisitions are already starting to play out on both sides.
“Not only can we give them capital, go-to-market and engineering support, but we’ve seen everything they’re going through before,” Ward says.
“I’m directly working with the Capdesk team right now and they raise an idea and I’m able to say, we tried that in 2016 and it didn’t work — don’t make the same mistake we made."
Carta was founded in San Francisco in 2012, whereas Capdesk began life in 2015.
“So these acquisitions also bring a lot of history from the US to these younger European companies,” Ward concludes.