eShares wants to be the platform for all things equity.
From cap table management to secondary transactions, eShares’ software helps businesses like Slack, Flexport and Funding Circle keep tabs on their shares.
The startup is raising a $42 million Series C, led by Menlo Ventures and Social Capital. Matt Murphy from Menlo Ventures and Arjun Sethi from Social Capital will be joining the board.
Murphy said he invested in eShares because of its “vision about building the ownership graph, which makes it easier to track, value, understand, and ultimately trade/monetize ownership.”
eShares has a subscription business model for its equity management software and works with 6,000 companies on corporate governance and compliance. It can also issue stock to investors electronically.
And now eShares is hoping to work with companies on the IPO process. CEO Henry Ward told TechCrunch that “our job is to blur the lines of being public and private to make them almost indistinguishable.” He hopes that eShares can eventually serve as a replacement for the underwriting bankers.
But it already has plenty of other competitors to challenge. When it comes to facilitating secondary transactions, eShares competes with the Nasdaq Private Market. Both work with companies to sell shares to accredited investors.
It also competes with Ipreo for investor valuation and portfolio management. eShares recently acqui-hired a division of Silicon Valley Bank to make headway in this space.
There’s also Solium, which helps companies manage their shareholder information. Solium just acquired Capshare for its equity-tracking software.
Since eShares has its hand in all the equity-related businesses, it hopes this comprehensive approach will remain a selling point.
Sethi said that ultimately Social Capital invested because they believe eShares will “build the financial rails to bring the relative efficiency, liquidity, and transparency of public markets to the private market.”
Founded in 2014, eShares previously raised capital from Industry Ventures, Spark Capital, Union Square Ventures and others.