Revenue Climbs at Carta, a VC Favorite Now Valued at $6.9 Billion After Private Stock Sales

Launching an exchange to help employees and investors sell stock in private startups may seem an odd choice for this year, given the boom in public listings that promise imminent cashouts. But Henry Ward, who founded Carta eight years ago to develop such an exchange, is betting that demand is still high. If he needed proof, he could point to recent appetite for shares of his own company, which more than doubled in value on the newly launched exchange from when Carta last raised money privately. Those trades value Carta at $6.9 billion.

Meanwhile, Carta’s core business of selling software to investors to track their portfolios is growing strongly. The company’s annual recurring revenue, or customer commitments to buy its software over the next 12 months, is currently around $150 million, up from $50 million two years ago, according to a person close to the company, noting that Carta isn’t profitable. That means new buyers of Carta shares paid a multiple of 46 times its recurring revenue, which is tame compared to valuation multiples of some other enterprise software firms. A company spokeswoman said Carta does not publicly disclose its finances.