Carta’s valuation to be cut by $6.5 billion in upcoming secondary sale
Carta, a once-high-flying Silicon Valley startup that loudly backed away from one of its businesses earlier this year, is working on a secondary sale that would value the company at $2 billion, TechCrunch has learned.
Carta is working with the investment bank Jeffries on the sale and initially hoped to find demand for the offering at a valuation of $4 billion, but according to our sources, even $2 billion may prove ambitious.
That’s a massive, if not entirely unexpected, drop in valuation for Carta, which originally focused on cap table management software but began over time to evolve into a “private stock market for companies.” Its goal was to take advantage of the network of companies and investors that use its platform and into which it has insights. The big idea was to become the transfer agent, brokerage and clearinghouse for all private stock transactions in the world.
As part of that narrative, Carta launched an exchange that aimed to find buyers for shares using an auction-style system, and it later used this same system to bolster its own value in the eyes of investors. Indeed, after big leaps in valuation, from $1.7 billion in 2019 to $3.1 billion in 2020, Carta announced in the summer of 2021 that it was worth a whopping $7.4 billion after first selling $100 million worth of its shares at a $6.9 billion valuation on its own platform.
