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Singapore and Hyderabad-based equity management SaaS startup Qapita has completed 100% acquisition of Pune-based company ESOP Direct in an all-cash deal. 

As part of the deal, ESOP Direct and Qapita have become a combined entity that will manage over $12 Bn worth ESOPs. Furthermore, Qapita will take full ownership of ESOP Direct’s operating entities from its shareholders. 

Post the acquisition, Qapita plans to strengthen its product and engineering teams with over 100 staff hiring. It also plans to add over 1,200 customers to its base and expand through cities including Bengaluru, Hyderabad, New Delhi, Mumbai, Pune, and Chennai. It further eyes expanding to Southeast Asia including Singapore and Jakarta.

“This acquisition is an important step to executing our vision of creating one unified platform for all equity matters in a bid to build rails for the private markets. Complementing knowledge leadership with cutting-edge technology will allow us to serve customers through the lifecycle, from incorporation to liquidity events to IPOs and beyond,” said Ravi Ravulaparthi, CEO and cofounder of Qapita.

Set up in 2019 by Ravi Ravulaparthi, Lakshman Gupta and Vamsee Mohan, Qapita provides equity management solutions such as captable management and employee stock ownership management to startups and other private organisations. 

Qapita estimates that the value of private securities in this region will exceed over $1.5 Tn and the sector will produce 200 to 250 unicorns within the next few years. 

Founded in 1999, ESOP Direct offers equity-based compensation services such as ESOP plan conceptualisation, ESOP plan administration and its compliance. In the last two decades, it has designed more than 1000 plans and managed over 500 plans on its platform My ESOPs.

“The coming together of our two businesses would complement each other’s strengths. It will help our clients and employees to deliver downstream financial transaction services through a unified platform. This step is a logical progression of our current business model and in line with the global trends in this domain,” said, Harshu Ghate, cofounder and managing director of ESOP Direct. 

In the previous year, Qapita secured $15 Mn in its Series A funding round whilst $5 Mn was raised in its pre-Series A round. 

Its cap table includes Vulcan Capital, East Ventures, MassMutual Ventures, Endiya Partner, NYCA, Alto Partners, Partners of the Northstar Group, Citi Bank, K3 Ventures, Mission Holdings, Anjali Bansal from Avaana Capital and Sujeet Kumar from Udaan, among others. 

According to an Inc42 analysis, Indian startups bought back over $150 Mn of ESOPs from their employees between January to May this year.