These days, private investors have a range of options for investing in startups without having to deal with them in real life. This ecosystem more or less started with AngelList, but there are now a plethora of options — such as Carta, Allocations, Vauban and Odin — that startups can use to raise funding and investors can deploy to manage their transactions.
A new player in the space, Quoroom, founded by two Ukrainians, is poised to scale up its own take on the formula.
The startup, which lets startups raise both equity and debt, has acquired Investory.io, a smaller company in the space based in Vienna. Although terms of the deal were undisclosed, the acquisition means Quoroom will now count more than 30 funds and angel investor groups as customers, and have around 1,000 companies using its infrastructure for cap table management and updates.
Investory had raised only $1.5 million in venture funding before this acquisition, and most of that came from accelerator Startup Wise Guys. Quoroom said it would be sunsetting the acquired platform over the next year.
As the venture ecosystem has grown, investment management has become increasingly fragmented and cumbersome — especially so for syndicates and funds, which have to grapple with disconnected tools, high legal fees, regulatory complexities, time-consuming portfolio management, and limited access to fresh capital, new members and LPs.
That’s without even going into the complexity of setting up special-purpose vehicles (SPVs) and complying with regulations around them, as well as a lack of mobility and flexibility when it comes to fund transfers.
Quoroom tries to solve those problems by integrating deal management, compliance, legal documentation, portfolio monitoring, investor relations and exit distributions into a single platform.
“It’s key differentiator is that it simplifies the entire fundraising process,” the company’s co-founder and CEO, Ulyana Shtybel, said. “We have advanced tools such as data rooms, investor CRM, soft-commitment forms, legal documents, and e-signing capabilities. Our payment reconciliation system reduces the closing time from 4 weeks to just 1 week,” she added.
The company started out in 2020 as legal tech platform for managing angel deals, and later expanded to service-syndicated deals. Today, founders who use Quoroom have legal documentation like SAFEs, ASAs and convertible note agreement incorporated into the investment flow, and for VC funds, the platform automates the LLP agreements, as well as covering KYC and AML checks. It also administers the SPVs created for each deal.
Quoroom said it uses an FCA-regulated entity to facilitate deals, but payment can also be done via a client’s bank account.
Admittedly there are plenty of other players in the space.
Cap table management platform Carta is the closest competitor considering the scope of services and infrastructure, although it has had a number of ructions recently.
Bunch, out of Berlin, raised $15.5 million in a Series A round in July, and claims that private funds currently manage some €2 billion worth of assets through its platform. This company, however, is aimed at larger venture investors.
Other solutions for investors include Odin (U.K.), which allows investors to pool money to back startups and VC funds. The company is on a brief pause after being told by the FCA, the UK financial regulator, to sort out its compliance operations.
We also have Sydecar (U.S.), AngelList (U.S.), Allocations (U.S.), Fundrbird, TotemVC, Vestberry (EU), Visible.vc (U.S.) and Rundit (EU).
Shtybel previously ran fintech incubation programs in partnership with Mastercard, OTP Bank and National Bank of Ukraine. She is also co-founder of Enkidu, a platform which has raised more than $3.5 million for projects in Ukraine since 2022. Her co-founder and CTO, Denys Goncharenko has 10 years of experience in software engineering.
Platforms like Quoroom are pushing at an open door. Millennials are expected to inherit a total of $30 trillion to $68 trillion (some estimates reach $140 trillion) by 2030.
This means more money is likely to shift into venture capital and impact-focused investing, with the capital being deployed on a deal-by-deal basis as younger investors get into investing. Many of them will be highly familiar with using online platforms to do so.