Carta gives up the dream of being the ‘Nasdaq for private markets’


Angle down icon An icon in the shape of an angle pointing down. Carta CEO Henry Ward Arantza Pena Popo/Insider The shut down of Carta’s secondary markets product comes after the company was called out on LinkedIn for misusing customer data. CEO Henry Ward announced the change in a blog post, calling it “my greatest failure and disappointment.”It’s the latest setback for a CEO who is at the center of multiple legal battles with former employees. 

After two days of public flogging for its misuse of customer data, Carta says it will shutter its secondary trading business, giving up on being the go-to liquidity solution for the startup ecosystem.

CEO Henry Ward, who just a day earlier was publicly sparring with some customers online, published a chastened blog post Monday announcing the change and calling it “my greatest failure and disappointment.” Carta’s secondary trading platform, known as Carta X, was announced in 2020 and at the time Ward told the Financial Times he intended to put the New York Stock Exchange out of business.

In his post yesterday, Ward admitted that Carta’s access to sensitive company information made it impossible to operate in the secondary market without at least the appearance of impropriety. It comes after the company was publicly called out on LinkedIn and X by the CEO of one of its customers, Linear, for using private data to target angel investors for sales outreach.

From its earliest days as eShares, Ward envisioned the company as much more than just the keeper of cap tables. The plan was always to become the “Nasdaq for private markets” by helping startups go public and trade their equity.

As part of that plan the company in 2018 acquired transfer agent Philadelphia Stock Transfer and launched a public company employee equity management service. Last year the company quietly abandoned that business and kicked customers off the platform.

Similarly Carta X was part of the company’s plan, backed by $300 million from Andressen Horowitz and others, to reinvent the capital markets and become the go-to place to buy and sell startup shares.

But according to Ward’s post, the business was bringing in only about $3 million annually when Carta decided to shut it down, compared with $250 million for the primary cap table business.

Without new sources of revenue growth, it’s unclear how Carta will be able to justify its multi-billion dollar valuation. The embarrassing loss of its secondary business is just the latest setback for a company that’s facing allegations of discrimination and abuse and currently suing two of its former executives.



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