Growing Equity in Europe: Our Series B Investment in Ledgy

by Jonathan GoldenSep 21, 2022

NEA invests in Ledgy, leading equity management platform in Europe

In recent years, the European venture ecosystem has matured significantly— the amount of funding that went into European startups grew more than tenfold over the past decade and the capital is just the beginning [1] . Europe houses world class talent, fueled by leading universities that have made entrepreneurship a core pillar of their education via courses, startup incubators, and other initiatives. This talent is flowing into major European hubs such as London, Berlin, Stockholm or Amsterdam, who are set up to house the next generation of category-defining European startups. We are extremely excited about the current state of the European venture ecosystem.

Still, there is one aspect of the European venture ecosystem that has lagged behind: Equity. Compared to their American counterparts, many European startups continue to treat equity as an afterthought to total employee compensation, rather than as a central pillar of entrepreneurship. Rewarding employees with equity is crucial to truly empower them as business owners in an environment that typically demands more responsibility and resilience to the ups and downs and entropic nature of an early-stage venture versus a typical corporate career. For startups, an ESOP (employee stock ownership plan) is a vital part of attracting, motivating and retaining best-in-class talent.

The lack of equity as a component of employee compensation, however, is not due to the lack of founders understanding its importance. Rather, regulatory complexity and taxation frameworks of many European countries have made it an uphill battle for startups to include equity as part of the employee’s compensation. While many countries’ regulators have acknowledged the importance of the matter, the difficulty of managing the ESOPs of employees across different countries prevails.

Europe’s thriving startup environment, coupled with the opportunity to make equity available to more startup employees, is why we are excited to announce NEA’s Series B investment in Ledgy, the leading equity management platform in Europe. Ledgy makes it easy for startups, employees and investors alike to manage their equity.

Born out of the founders’ passion for entrepreneurship and first-hand experience with the clunky and cumbersome use of spreadsheets for equity management, Ledgy enables employees to easily understand the value of their stake in the company with dashboards that include vesting periods and scenario planning.

Equity investing graphic

For startups, Ledgy empowers them in all equity-related matters and functions, including managing the captable, implementing and automating vesting rules, managing and reporting to stakeholders and ensuring compliance across regions. Ledgy also autosyncs with leading HR systems such as Personio or HiBob (and many more).

Dashboard example of Ledgy

Investors can get a better understanding of their portfolio, not only regarding portfolio metrics such as IRR or MOIC, but also for company-specific key metrics such as revenue, P&L and runway.

Dashboard example of Ledgy

Ledgy was designed with the principles of ease-of-use and an international-first mindset. We found the proof in this when looking at Ledgy’s intuitive UI, its deep set of functionalities, and most importantly, from customer feedback.

Today Ledgy is managing equity in 42 countries and for more than 2500 companies. Leading European startups such as Pleo, Trade Republic and Wefox have adopted Ledgy. The companies we have spoken to praised Ledgy for its ease of use— from initial setup to onboarding new employees and investors across different geographies. The unanimous feedback was that Ledgy allowed companies to grow, both in terms of headcount and across geographies, while drastically reducing the complexity of finance and legal functions.

From our initial meeting, we were consistently impressed with Ledgy’s founding team, Ben, Timo and Yoko. All three founders share a background in Physics from ETH Zurich and we could immediately feel their deep passion for entrepreneurship and their true understanding of the problem for which they are solving. The broader Ledgy team truly represents the diversity of the European ecosystem,with half of its workforce being female and also encompassing more than 25 different nationalities.

With this financing, Ledgy plans to further expand into new markets and implement additional features that make Ledgy the go-to-solution for more companies with a global mindset. If you are a startup or an investor thinking that Ledgy can help you in managing your equity, you can find out more about them here.

The information provided in this blog post is for educational and informational purposes only and is not intended to be investment advice, or recommendation, or as an offer to sell or a solicitation of an offer to buy an interest in any fund or investment vehicle managed by NEA or any other NEA entity. New Enterprise Associates (NEA) is a registered investment adviser with the Securities and Exchange Commission (SEC). However, nothing in this post should be interpreted to suggest that the SEC has endorsed or approved the contents of this post. NEA has no obligation to update, modify, or amend the contents of this post nor to notify readers in the event that any information, opinion, forecast or estimate changes or subsequently becomes inaccurate or outdated. In addition, certain information contained herein has been obtained from third-party sources and has not been independently verified by NEA. The companies featured in this post are for illustrative purposes only, have been selected in order to provide an example of the types of investments made by NEA that fit the theme of this post and are not representative of all NEA portfolio companies. The company founders or executives or any other individuals featured or quoted in this post are not compensated, directly or indirectly, by NEA but may be founders or executives of portfolio companies NEA has invested in through funds managed by NEA and its affiliates. Any statements made by founders, investors, portfolio companies, or others in the post or on other third-party websites referencing this post are their own, and are not intended to be an endorsement of the investment advisory services offered by NEA.
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