UAE-based Zest Equity, a startup digitizing private market dealings, has raised $3.8 million seed funding to build more tools for enabling fast and transparent transactions by ecosystem players while increasing their liquidity through secondary deals.
The seed round was led by Middle East Venture Partners (MEVP) with participation from the Dubai Future District Fund (DFDF), and DASH Ventures. This latest round brings the total funding raised by the startup to $5.7 million.
Zest Equity was founded by Rawan Baddour and Zuhair Shamma in 2021 initially as a marketplace for the secondary trading but evolved fast into a platform that enables ecosystem players like founders and venture capitalists to transact fast and openly online. Traditionally, these players transact offline, which can be tedious, obscure and costly.
Baddour says they took this path due to the lack of infrastructure to empower communication, connection and information sharing amongst different stakeholders in a cost-effective and digitized manner.
“We’re digitizing a lot of what is actually very manual, and we have taken a tech-first approach to automate as much as we can, while building a platform that is unique and scalable,” Baddour, a former banking executive, told TechCrunch.
Founders use Zest Equity’s tools to, amongst other actions, invite investors to fundraising rounds, share information including pitch decks and cap tables, and track deal processes. Investors get to submit their interest, see other VCs participating in the round, and sign documents.
Zest also provides the legal infrastructure to enable investors, including angels, group and form an investment syndicate or special purpose vehicles to enable them pursue shared venture interest. This saves time, administrative cost, and makes it easy for VCs, especially angels, to invest.
“We have built a digital platform that allows [founders and investors] to share or get data that they want to share, and invite their network of people to participate in deals. On the other side, we provide them with the legal infrastructure to group all of these people that they have brought in into a single entity to keep the cap table clean and to streamline the whole process,” said Baddour adding that the funding will go into building new tools to make the process even more seamless.
Zest is also building tools that will enable startups to build a standardized process for secondary share trade. Using these tools, startups can, for instance, set when a liquidity window opens, control liquidation, and approve information being shared to enable a secondary transaction. The tools are meant to bring transparency, accelerate sale approvals, and make it easy for investors to access liquidity.
“In a relatively short time, Zest Equity has already proven to be a valuable and dependable solution for digitizing private market transactions in the Middle East. As more startups and investors mature, they inevitably seek more avenues to liquidity and opportunity. This clearly illustrates that our ecosystem’s need for this solution is growing,” said Walid Mansour of MEVP, in a statement.
The startup is eyeing other emerging markets like Africa (North Africa), South Asia, South Asia, and Turkey, markets it says have similar gaps and issues.