Zest Equity, a firm in the UAE that digitizes private market transactions, has acquired $3.8 million in initial investment to develop new tools that would allow ecosystem stakeholders to interact quickly and transparently while growing their liquidity through secondary agreements.
Middle East Venture Partners (MEVP), the Dubai Future District Fund (DFDF), and DASH Ventures contributed to the seed round. The firm has now secured $5.7 million in capital due to this most recent round.
Rawan Baddour and Zuhair Shamma launched Zest Equity in 2021 to create a marketplace for secondary trading. However, Zest Equity quickly developed into a platform that enables ecosystem actors like founders and venture capitalists to interact quickly and freely online. These participants often deal offline, which may be time-consuming, confusing, and expensive.
According to Baddour, they chose this course since there was no infrastructure in place to enable cost-effective, digitalized communication, connections, and information exchange among many parties.
“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, said to TechCrunch.
Among other things, founders use Zest Equity’s tools to manage transaction processes, communicate information like pitch decks and cap tables, and invite investors to fundraising rounds. Investors are allowed to view other VCs participating and signing paperwork.
Additionally, Zest offers the legal framework for investors, including angels, to organize into investment syndicates or other special-purpose entities and pursue joint venture interests. This facilitates investment by VCs, especially angel investors, and reduces time and administrative costs.
We created a digital platform enabling [founders and investors] to share or get data they wish to share and invite network members to negotiate. To keep the cap table clean and to streamline the entire process, on the other hand, we give them the legal framework to group all of these new hires into a single entity, said Baddour, who added that the funding will be used to develop new tools to make the process even more seamless.
Additionally, Zest is creating the tools necessary for entrepreneurs to create a regulated secondary share transaction mechanism. For example, startups can use these technologies to govern liquidity windows, liquidation, and information sharing necessary for secondary trades. The technologies are designed to increase transparency, quicken sale approvals, and simplify investor access to liquidity.
“Zest Equity has already established itself as a valued and trustworthy option for digitizing private market transactions in the Middle East in a very short period. As businesses and investors get more established, they necessarily look for new opportunities and sources of liquidity. This amply demonstrates the rising demand for this solution in our ecosystem, according to a statement from MEVP’s Walid Mansour.
The business is interested in additional rising areas, including Turkey, South Asia, South Asia, and Africa (North Africa), which it claims have comparable difficulties and gaps.
