One of the technology-based firms RuleZero which automates and manages equity ownership in venture-funded startups has raised 3 crores in new funding round from Zerodha’s Rainmatter Capital, Reddy Futures, IndusLaw, stated by its founders.
The company was founded by Satish Muguavalli and Srinivas Katta in 2019. The platform mainly is to manage ownership data, automates share issuance processes, and offers mechanisms to track and certify cap tables of startups and budding ventures.
During its first phase of growth and initial operations, it was looking to automate the processes for share issue, share transfer, ESOP plan generation, and ESOP management. It will also be able to certify cap tables and later work upon numerous ways to flourish and expand the services.
Of the statements the company is stated that- “shares are the building blocks of organization is. Today once you decide who you want to issue shares to, there is a complete process that goes on and it’s entirely manual hence we are here to automate this highly crucial process and will make the cap table a system of intelligence”.
Later, in the second phase, it will look to build products to enable secondary transactions of unlisted securities enabling and offering liquidity to early investors and employees of budding ventures.
One of the founders said that the platform also adds a layer of intelligence over the data it captures which makes the lives of investors, bankers, lawyers, and CA, and all other financial entities easily and seamlessly carry out the important procedures without any hindrance.
The main motive of the company is to eliminate errors in the procedure and cap tables, and help the respective people to understand the complexity of liquidation preference certify cap tables to cut downtime for transactions where detailed due diligence is not needed.
The proceedings and the funds that are being raised will be utilized for product development marketing and looking to focus on winning clients in the Indian marketplace first.
One of the investors, Zerodha said- “every startup manager is their cap table differently and there is a lot of inefficiencies”. In the future, if they do well this has the potential to become a marketplace for secondary transactions as well and we could have a more synergistic role to play in the long run”.