“Challenging Carta: A Korean Startup’s Vision for Cap Table Management”

A South Korean startup called QuotaLab is on a quest to follow in the footsteps of Carta, the cap table management company that’s used by a host of startups and investors in the U.S.Carta started life as “eShares” in 2012 as a cap table management service that startups could use to issue equity to their investors and employees. Today, its stable of offerings has expanded to include everything from valuation and equity management, to bookkeeping, risk assessment and brokerage services. A Y Combinator alum, QuotaLab also started off as an equity management service (called QuotaBook) for startups and investors in South Korea. It also offers investment management such as investments, returns, asset changes, markdowns, valuations, accounting, e-approvals and risk management,” Choi added. According to Choi, the equity management market has many sides you can tackle.

The pursuit to follow in the footsteps of successful companies is a common thread in the startup world, and South Korean startup QuotaLab is no exception. Inspired by the achievements of Carta, a popular cap table management company in the U.S., QuotaLab strives to make a similar impact in its home country and beyond.

Originally known as “eShares,” Carta was founded in 2012 as a cap table management service for startups to issue equity to their investors and employees. Over the years, it has expanded its offerings to include various financial services, including valuation, equity management, bookkeeping, risk assessment, and brokerage services. However, the company faced controversy and ultimately shut down its secondary share marketplace earlier this year.

In the same vein as Carta, QuotaLab began in 2022 as an equity management service called “QuotaBook” for startups and investors in South Korea. With the recent integration of investor-facing fund management service LogosSystem, QuotaLab now aims to provide a comprehensive platform for the Korean startup and investor community to manage their funds, equity, investments, and relationships with limited partners.

“Though we started as a software company, we’re now planning to evolve into a financial company,” says Andy Choi, CEO and co-founder of QuotaLab. “With our significant market share on both the startup and VC sides, and being the sole player on the LP side, we serve as the financial backbone of the Korean venture ecosystem. We’re constantly exploring new financial opportunities to pursue.”

Founded by three former venture capitalists – Choi, Dan Hong, and Pilseon Jun – QuotaLab recognized the challenges faced by general partners (GPs) and saw the potential for a vertical SaaS solution in the market. By streamlining old tools and spreadsheets into one platform, investors could manage their portfolio companies and share crucial data with their limited partners.

In addition to the recent merger, QuotaLab raised a $23 million round last year and acquired LogosSystem for $30 billion. “Before the acquisition, our service only dealt with startups and investors (GPs),” explains Choi. “But with LogosSystem on board, we can now connect the entire startup-to-investor-to-LP ecosystem, a first in South Korea’s venture history. This move solidifies our dominance in the market.”

Choi adds, “LogosSystem’s platform provides functionalities for managing funds such as LP management, contact points, commitments, capital calls, distributions, and reporting. It also offers investment management services like investments, returns, asset changes, markdowns, valuations, accounting, e-approvals, and risk management.”

Notably, LogosSystem enables LPs to manage their fund of funds and related assets. Compared to other similar services, such as BlackRock’s eFront, Choi believes LogosSystem offers more sophisticated features.

When it comes to equity management, Choi explains that there are several aspects that companies can approach. “One way is through managing already issued securities like shares, bonds, or convertibles,” he says. “In this area, a general Excel or enterprise resource planning solution can suffice for simple back-office data management. However, with deeper relationships between startups and investors, equity management platforms must cater to market nuances, including different VC dynamics, culture, fund LP structures, and more.”

QuotaLab plans to capitalize on these opportunities by focusing on stakeholder relations, specialized services for securities data management, and addressing different equity award markets. “One of our goals is to provide a more tailored and comprehensive solution for investors, as well as create opportunities for back and cross-selling between QuotaLab and LogosSystem,” says Choi.

Regarding post-merger plans, QuotaLab has already begun integrating LogosSystem into its existing platform, QuotaBook. “Initially, there were some overlaps in functionalities, mainly for interacting with LPs,” explains Choi. “So, we’re unifying the affected features of QuotaBook with LogosSystem. While LogosSystem has more advanced functions, QuotaBook focuses more on portfolio companies. Through integration, we aim to streamline the flow of data between the two platforms.”

With the merger, QuotaLab now boasts a team of 75 members, including the 45 employees from LogosSystem. Choi ensures there will be no changes to the company’s current structure, as LogosSystem’s business remains solid.

As QuotaLab looks to expand into new markets, it faces competition in the cap table management space. Companies like Qapita and Sprout in Southeast Asia, along with Carta, AngelList, Pulley, and Deel, will test QuotaLab’s strengths and innovation. However, driven by their mission to drive financial infrastructure in the Korean venture ecosystem, QuotaLab maintains a firm stance. With the potential for more funding and possible acquisitions on the horizon, the company is eager to make its mark in the global market.

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Dylan Williams

Dylan Williams is a multimedia storyteller with a background in video production and graphic design. He has a knack for finding and sharing unique and visually striking stories from around the world.

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