fintech ledgy raises $22 million

Developing a startup is difficult. You need to have the right idea, market fit and find the top talent to build your product. The latter point can prove particularly difficult as smaller startups compete with established businesses with deeper pockets for the best recruits. Many budding businesses overcome this challenge by offering new employees equity in the company, saying that the shares will become more valuable the more successful the company becomes.

However, this creates another complex and potentially painful hurdle for startups to overcome: staying compliant with local regulations as the business grows.

“After all, in Europe alone there are 30 different sets of rules and regulations governing how you actually offer shares to employees,” Yoko Spirig, CEO and co-founder of equity management startup Ledgy, told RBI.

Ledgy is a fintech startup designed to help entrepreneurs overcome this time-consuming challenge. The startup just raised a $22 million Series B funding round toward that goal. While Spirig declined to share the fintech startup’s new valuation after the round, she said Ledgy has achieved a “significantly higher” valuation than when “we raised our Series A last year.” Ledgy also did not share the valuation after the $10 million Series A round.

“There is nothing more effective than aligning the entire team around a long-term mission,” says Spirig. “So giving team members a way to access all important documentation very easily, and ensuring they have data and insights to help them understand their stock holdings in more detail, is another huge benefit for companies.”

Fintech Ledgy raises $22 million in Series B

New Enterprise Associates (NEA) led Ledgy’s Series B round. Sequoia Capital, which led the Series A round, returned for the new cash injection. Other backers include Speedinvest, btov, Visionaries Club and VI Partners as well as existing angel investors.

“Through my lens as an investor in NEA, combined with my past experience from category-defining companies like Airbnb, Dropbox and Hubspot, I’ve seen the central role ownership plays in building lasting companies,” said Jonathan Golden, Partner at NEA. in a statement. “The equity management challenge is particularly acute in Europe, with different legal structures governing equity in all countries.”

Spirig and co-founders Ben Brandt and Timo Horstschäfer, who serve as Ledgy’s CPO and CTO respectively, launched the startup in 2017. They came up with the idea after meeting the founder of a Swiss company that showed how complex stock management could be.

“He opened a spreadsheet and scrolled through 200,000 rows—each row representing a single part,” Spirig recalls. “Without a single product to manage share ownership, it took him hours and hours every month to manage all the admin.”

Not resting on their laurels, the Ledgy team seized the opportunity and began laying the foundations for their fintech startup. Their first step was to gain as much insight from the startup community as they could.

“The first thing we did was [to] start talking to as many customers and entrepreneurs as possible about the equity problems they were facing, says Spirig.

Ledgy’s solution integrates with secondary platform Semper, compensation benchmarking platforms Pave and Figures as well as over 40 HRIS platforms, such as Hibob, Personio and Workday.

Today, Ledgy boasts that it has become the preferred equity management partner for the portfolios of over 50 leading venture capitalist (VC) firms and accelerators, such as Techstars, Entrepreneur First and APX. Ledgy’s clients include European fast-growing companies such as Getir, Kry, Monese, Selina Finance, Gorillas, Scalapay and wefox.

As the company grew, Ledgy faced many of the same challenges that customers faced.

“One of the most important things we’ve had to overcome is a challenge many of our customers face – how to get the operational side of things right while scaling internationally,” says Spirig. “This time last year we had just hired our first employee outside of Switzerland and after 12 months we have more than a third of the company outside of our head office market with hubs in London and Berlin to complement our head office in Zurich. We have had to go through the process to get the tax authority’s approval for our share schemes in new countries.”

Ledgy will use the cash injection to further grow fintech across Europe and continue to develop the product.

B2B fintechs all around

Ledgy is the latest in a growing line of fintech companies trying to help businesses cut through red tape and offer better financial products. First, a growing number of B2B-focused buy-now-pay-later businesses have launched to offer installment products to companies. This wave includes Germany’s Billie, Amsterdam-based Biller, New York-based Behalf and Affirm spinout Resolve.

There are also B2B-focused companies like Sprinque that aim to reduce payment complexity for businesses.

The news of Ledgy’s Series B round comes as the fintech industry shows signs of slowing down.

As of last week, the fintech industry has raised just $32.5 billion across 1,161 VC deals in 2022, according to data from research firm GlobalData. That’s a far cry from the $84.5 billion secured by VCs in 2021.

GlobalData is the parent company of RBI and its sister publications.