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Pulley gets $40M to take on Carta

Jul 13, 2022

Illustration: Shoshana Gordon/Axios

Pulley, an equity management software company, raised $40 million in Series B funding in a round led by Founders Fund.

Why it matters: Pulley has a much larger competitor in the space (Carta) but its new board member, Founders Fund General Partner Keith Rabois, believes the startup could surpass its now $7.4 billion rival.

Driving the news: This is not an everyday strategy for Founders Fund, but it does have precedent. Notably, Rabois led the firm's investment in corporate card startup Ramp even though its larger competitor Brex had been around for a few years.

  • "We looked at the market opportunity and believed it was vast," said Rabois, when asked about how he planned to navigate the fierce competition. "Though there are startups that do have traction in this space, Pulley has a great founding team [that could] surpass people that had an earlier start."

Details: The round values the company at between $150 million and $300 million.

Context: CEO Yin Wu notes currently, Pulley currently has a younger set of tech companies as customers than its peers, though it has also been getting interest from later-stage and non-tech businesses. It's customers include Clubhouse and Bitwise.

What to watch: As part of its growth strategy, Pulley is pushing aggressively into servicing crypto companies, which often have different cap table management needs due to their discrete tokens. Pulley, which recently launched a token cap table tool, estimates that 3% to 5% of its customers are in the space.

  • The startup also plans to grow by helping companies manage their international equity plans.

Of note: Startups like Carta act, to an extent, as a barometer for the broader venture capital industry. At the start of the pandemic, for example, Carta laid off 161 employees over concerns of a recession.

  • Wu believes cap table management software will be even more important now, as investors find opportunity to lay onerous and more confusing terms to funding rounds upon startups hungry for cash.
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