Cap table startup Carta valued at $8.5 billion

The valuation of cap table management startup Carta jumped to $8.5 billion earlier this year after employees sold shares to investors, CEO Henry Ward told Axios on Thursday on the sidelines of the Web Summit conference.

Why it matters: It's a significant bump up from Carta's last known valuation of $7.4 billion in August 2021, and highlights the business' rapid growth during the pandemic. The big question is if it can maintain that growth next year.

Context: Carta manages employee equity for other startups (including Axios), meaning the company is a proxy for how the rest of the startup market is doing. When the venture market is strong, so is Carta, a startup itself.

Details: A consortium of new investors bought Carta shares in January from employees. Ward declined to reveal the names of the buyers, but notes many were crossover funds and growth investors.

By the numbers: Ward said the company is likely to hit $330 million in annual recurring revenue this year, up 32% from the previous year and inline with its forecast of $300 million to $350 million.

• Carta's ARR was $150 million in 2020, $104 in 2019, and about $50 million in 2019, he said.
• The company's overall revenue is expected to be about $350 million to $360 million this year.

Of note: "Like everybody else, we're looking at 2023 and saying, 'can we sustain that level of growth?" Ward said, adding that the company has slowed hiring. "My guess is we'll start we'll start mapping out a path to break even [in 2023]."

• The company is not working on new products and instead focusing on growing its existing seven or eight products. Carta is also expanding its reach abroad, buying companies in India and Europe.

What's next: Carta has no plans to IPO any time soon, with Ward saying shareholders have been able to find liquidity by selling shares on its CartaX platform. The earliest Carta would begin considering such a move is in 2025 or 2026, Ward said.