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UAE-based Zest Equity, a startup that digitizes private market transactions, has raised $3.8 million in seed funding to build more tools to enable ecosystem participants to conduct transactions quickly and transparently while leveraging second-tier Level trading increases its liquidity.
This seed round was led by Middle East Venture Partners (MEVP), with participation from Dubai Future District Fund (DFDF) and DASH Ventures. The latest funding round brings the startup’s total raised to $5.7 million.
Founded in 2021 by Rawan Baddour and Zuhair Sharma, Zest Equity began as a secondary trading marketplace but quickly evolved into a platform that enables ecosystem players such as founders and venture capitalists to trade online quickly and publicly. Traditionally, these players conduct offline transactions, which can be tedious, obscure, and expensive.
Baddour said they took this path because of a lack of infrastructure to communicate, connect and share information among different stakeholders in a cost-effective and digital way.
“We’re digitizing a lot of work that is actually very manual, and we’re taking a technology-first approach to automating as much as possible while building a unique and scalable platform,” said Baddour, a former banking executive who blogged about technology.
Founders use Zest Equity’s tools to, among other things, invite investors to participate in funding rounds, share information including pitch decks and equity structures, and track deal flow. Investors can submit their interest, meet with other venture capital investors participating in the round and sign documents.
Zest also provides legal infrastructure to help investors (including angel investors), syndicates and form investment syndicates or special purpose vehicles to enable them to pursue common venture capital interests. This saves time and administrative costs and makes it easier for venture capital, especially angel investors, to invest.
“We have built a digital platform that allows [founders and investors] Share or obtain the data they want to share and invite their network to participate in the transaction. On the other hand, we provide them with the legal infrastructure to bring all these people they bring in into one entity to keep the equity structure clean and streamline the entire process. ” Baddour said, adding that the funds will be used to build new tools to make the process more seamless.
Zest is also building tools to enable startups to establish standardized processes for secondary stock trading. For example, using these tools, startups can set when liquidity windows open, control liquidation and approve the sharing of information to enable secondary trading. These tools are designed to increase transparency, speed up sale approvals and make it easier for investors to access liquidity.
“In a relatively short period of time, Zest Equity has proven to be a valuable and reliable solution for the digitization of private equity market transactions in the Middle East. As more startups and investors mature, they inevitably Seeking more access to liquidity and opportunity. This is a clear indication that our ecosystem’s demand for this solution is growing,” MEVP’s Walid Mansour said in a statement.
The startup is looking at other emerging markets such as Africa (North Africa), South Asia and Turkey, where it says similar gaps and issues exist.
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