Last week the first auction on CartaX was successfully settled. Finsight VC was among 53 institutional investors who took part in the auction. We have been investors in Carta since Series F and are proud to be a part of Carta’s exciting journey towards more efficient and liquid secondary market for private companies.
CartaX — exchange for the private companies stocks trading built by Carta. First auction on CartaX was held for Carta stock and it was a complete success: 53 different institutional investors in a highly competitive and structured manner determined a fair market valuation which was set at $6.9B and acquired more than $99M from the existing shareholders. CartaX has executed 1484 orders from 414 participants. Carta will run quarterly auctions for its own stock and will enable other private companies to list on the platform.
We believe that CartaX launch will transform the secondary market which is highly inefficient for both investors and sellers (each transaction is a custom legal project) and companies (high transactional costs). CartaX through automation and complete integration with captable management software can automate most of the underlying processes and standardize the price discovery in a competitive and efficient way enabling private companies to provide their shareholders with regular and predictable liquidity to match their needs without volatility and scrutiny of the public markets.
As more and more growth stage companies prefer to stay private longer in order to invest in aggressive growth and innovation, right now the need for CartaX is more than ever. CartaX narrows the gap between extreme liquidity of public markets and very low liquidity of private markets providing the benefits of an exchange prior to or as alternative to a public listing. We think that the existence of CartaX will be strongly positive for all participants of the startup ecosystem.
Here is what one of the VC market pioneers – Marc Andreessen thinks about the importance of CartaX launch:
“We are proud to have led Carta’s Series E nearly two years ago, motivated by this vision and plan. We will now recommend this approach to our portfolio companies when they reach the stage where this approach is suitable for them. We will also be a buyer ourselves of private company stock via the CartaX exchange. And we suggest that companies and investors throughout the tech industry consider CartaX as well. The third configuration — beyond the false binary of simply private or public — is here.”