Equity management for Qapita acquires ESOP Direct

Qapita, a Singapore and India-based equity management firm, has completed a 100 per cent acquisition of Pune-based ESOP Direct in an all-cash deal.

This will see Qapita secure full ownership of ESOP Direct’s operating entities from its shareholders.

The transaction details haven’t been disclosed.

With this acquisition, Qapita will expand its customer base in India and Southeast Asia to more than 1,200 customers. The combined entity will also manage more than $12 billion in Employee Stock Option Plans (ESOPs), with more than 130,000 employee owners. 

Qapita will also expand its product and engineering team to more than 100 professionals while expanding its presence in major startup hubs India such as Bangalore, Hyderabad, New Delhi, Mumbai, Pune, and Chennai. In addition, it will boost its Southeast Asian presence in Singapore and Jakarta while doubling its employees from 100 to more than 220.

“This acquisition is an important step to executing our vision of creating one unified platform for all equity matters, in our 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. We look forward to enabling our customers in creating more equity owners in this region and making every one of them count”, said Ravi Ravulaparthi, CEO and co-founder of Qapita.

ESOP Direct is a provider of end-to-end solutions in the equity compensation domain in the Indian market. Its service offerings encompass the entire lifecycle of Employee Share Plans from plan conceptualisation, design, documentation, ongoing plan administration, employee support, compliance, valuation, and reporting. Over two decades, ESOP Direct has designed over 1,000 plans and manages over 500 plans on its proprietary platform, My ESOPs.

Commenting on the acquisition, Harshu Ghate, co-founder and managing director of ESOP Direct, said, “The coming together of our two businesses would complement each other’s strengths. It would 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. Our deep domain expertise and thought leadership will now be leveraged beyond the Indian market. We will continue with our endeavor to structure pathbreaking solutions to ensure success of Employee Share Plans of our clients ”

Qapita expects the value of private securities in this region to exceed $1 to 1.5 trillion with the presence of 200 to 250 unicorns within the next few years, and that scalable digital solutions will be critical for such an ecosystem to thrive. Creating a digital ledger for management of equity will be the first step towards creating a Qapita marketplace for liquidity as it estimates that more than $250 billion in equity will require liquidity solutions. 

Qapita is backed by Vulcan Capital, East Ventures, MassMutual Ventures, Endiya Partners, Citibank, NYCA Capital and angel investors from India and Southeast Asia.