Remote payroll startup Dell has acquired fintech Capbase for an undisclosed amount in a cash and stock deal, the companies told TechCrunch exclusively.
As the name suggests, San Francisco-based Capbase says it can update a company’s capitalization table in real time as it issues shares, signs contracts and raises money from investors. It then uses that data to build API integrations used to process bank accounts, payroll and business insurance. Greg Miaskiewicz and Stefan Nagy In the year He founded the company in 2018 and has raised a total of $6 million in investment capital from companies such as Better Tomorrow Ventures, Clocktower Technology Ventures, Great Oaks Venture Capital, Village Global and several angel investors.
“We He tried to make it easier to start a company, raise money and take out equity. Miaskiewicz He told TechCrunch in an interview. Capbase ran a private beta until April 2021, and has seen its customer base grow “from 10 to 500 in less than 18 months,” though it declined to reveal firm revenue figures.
Alex Bouaziz and Shuo Wang In 2019, San Francisco-based Dell began a mission to enable remote-first Businesses to hire workers and contractors in other countries “in less than five minutes”. Dell also says it offers companies the ability to pay groups in more than 150 currencies with a “click.” The company has raised a total of around $680 million, with a final valuation of $12 billion, and said it will cross the $100 million ARR (annual recurring revenue) threshold by March 2022. (to increase the ARR month by month at a “strong clip”.)
Over the years, Dell has refined the model, adding more features and acquiring other startups to enhance its offerings, including equity-related services for customers. In a consulting capacity. For example, in addition to handling payroll on those arrangements, it advises recordkeepers and contractors on how to manage their taxable arrangements. Dell plans to combine those services by acquiring Capbase A new product designed for equity management and release.
Bouaziz said in an interview that he has Dell customers. They grappled with questions of how to provide equity to workers and contractors in unincorporated countries and what to do to comply with local laws, “where and how to start equity assistance.”
Interestingly, Capbase was one of Dell’s early customers and Bouaziz says he has always been “grateful”. Miaskiewicz’s Thinking about compliance.
So, as questions from customers continued about how to provide fairness to people in other countries, especially given the different labor laws everywhere, Dell began looking for solutions. In fact, it was a problem he had to solve on his own, especially considering that the company offers “equal equity to people no matter where they are.”
“We looked at US compliance and realized it was a very, very difficult thing to do,” Bouaziz told TechCrunch. “Equity is an important part of companies, so enabling other companies to offer across geographies and we felt it was something we needed to tackle.
Instead of “just building from scratch,” Dell chose to work with Capbase.
Simply put, with Capbase, Dell hopes to ease the complexities of starting and growing companies. According to Bouaziz, Capbase is working on mergers and acquisitions in their early days, as well as completing the necessary documents and providing equity as they grow.
“They provide technology and compliance expertise to help hundreds of businesses in America seamlessly incorporate, set up bank accounts and boards, manage cap tables and of course provide equity,” he added. “All of these things complement our efforts to help companies scale easily, all in one place, with compliance.”
In particular, Dell believes that increasing Capbase will help it “support startups in the US and help companies go global.” There is no doubt that this will enable Dell to better compete with others in the space.
For example, last October, workforce management platform Rippling revealed. New global payroll product The CEO Parker Conrad is not shy about admitting that he is in direct competition with Dell. At the time, Conrad told TechCrunch that the new offering would give Rippling’s U.S.-based customers a more “seamless” way to pay workers around the world — both full-time and contract.
Dell is one company map that doesn’t try to compete.
“Capbase’s first product is similar to a map and strip atlas,” says Bouaziz. “We’re not doubling down on that product. I think cap table management is important but a lot of companies have built a product around it and reinventing the wheel is not something we like to do. Entering this market would be reinventing the wheel.
“We really want it Build global equity that unlocks a record model employer product for employees around the world,” he added. We want to take the in-house know-how developed in America and manufacture it on a global scale.
For Capbase, he admitted, the offer to acquire in an extremely challenging macro environment was more attractive than “continuing a fundraising path in a rocky economic climate.” Miaskiewicz.
The startup’s 20 employees are all joining Dell.
Miaskiewicz believes Dell will emerge as a stronger company when the two companies join forces.
“If you’re trying To sell services to startups or companies that are going to be the next big tech companies, you want to build that relationship and provide service as early in the life cycle as possible because as you get bigger, you can build and provide more and more services. They can monetize that relationship and build customer lifetime value, he told TechCrunch.
Meanwhile, Dell expects to have a “pretty solid product” available to customers — including companies like Nike, Cloudflare, Shopify and Subway — by early February.
“Obviously with global compliance, the product is getting more and more complex and we fine-tune it to comply with local jurisdictions and local laws from time to time,” says Bouaziz.
Equity management is clearly a hot area. On January 10, investment giant Fidelity announced that it had acquired Showbox, a venture-backed fintech startup, for an undisclosed amount. Shoobx is a software provider that automates equity management operations and provides financial support to private companies “at all stages of development” through initial public offerings. Its services include helping companies send offer letters, offering equity to new employees, managing their capital tables and obtaining 409A valuation reports, among other things.