Dubai, United Arab Emirates – Zest Equity, a Dubai-based startup aiming to digitize private market dealings, has raised $3.8 million in seed funding to further develop its platform for enabling fast and transparent transactions between ecosystem players. The seed round was led by Middle East Venture Partners (MEVP) and also saw participation from the Dubai Future District Fund (DFDF) and DASH Ventures.
This latest injection brings Zest Equity’s total funding to $5.7 million since it was founded in 2021. The company initially started as a marketplace for secondary share trading but soon pivoted into a full-fledged platform facilitating transactions and connections between founders, venture capitalists, and other private market participants.
Traditionally, these players conduct deals offline through tedious, obscure, and costly processes. Zest Equity aims to leapfrog legacy practices by taking a tech-first approach to automate and streamline private market transactions.
“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,” said Rawan Baddour, Co-Founder and CEO of Zest Equity.
Baddour, a former banking executive, started Zest Equity in 2021 alongside Co-Founder Zuhair Shamma after recognizing the lack of digital infrastructure enabling efficient communication, connections, and information sharing between private market stakeholders.
The startup’s platform provides tools for founders, investors, syndicates, and special purpose vehicles to seamlessly conduct fundraising, share data, track deal progress, form investment groups, and eventually trade shares in secondary transactions.
For founders, Zest Equity lets them invite investors to funding rounds, share pitch decks and cap tables, and monitor the deal process from start to finish. Investors can view deal information, participate in rounds, and connect with other co-investors through the platform.
The startup also furnishes the legal infrastructure to help investors form syndicates or special purpose vehicles for pursuing collective investment opportunities. This saves time, administrative expenses, and enables groups of angels, VCs, and other investors to back startups at scale.
“We have built a digital platform that allows [founders and investors] to share or get data that they want to share, and invite their network of people to participate in deals. On the other side, we provide them with the legal infrastructure to group all of these people that they have brought in into a single entity to keep the cap table clean and to streamline the whole process,” Baddour explained.
Looking ahead, Zest Equity will utilize the new capital to build more tools for further streamlining private market transactions. One area of focus is developing standardized processes and infrastructure around secondary sales of private company shares.
Using Zest Equity’s upcoming tools, startups will be able to set liquidity windows, control share liquidation, and approve what information is shared to facilitate smooth secondary transactions. This will introduce more transparency, expedite sale approvals, and grant investors quicker access to liquidity.
As Middle East startup ecosystems and investor networks continue maturing, Zest Equity sees massive potential for its digitized approach to private market dealings.
“In a relatively short time, Zest Equity has already proven to be a valuable and dependable solution for digitizing private market transactions in the Middle East. As more startups and investors mature, they inevitably seek more avenues to liquidity and opportunity. This clearly illustrates that our ecosystem’s need for this solution is growing,” said Walid Mansour, Partner at MEVP, in a statement.
Beyond the Middle East, Zest Equity plans to expand into other emerging markets like North Africa, South Asia, Southeast Asia, and Turkey where it identifies similar gaps in private market infrastructure.
The Dubai-based company’s seed round marks one of the largest recent fintech investments in the region. It comes at a time of rapid growth in Middle East startup funding, which hit record levels in 2021 at $2.6 billion and is on pace to potentially double this year.
Zest Equity’s digitized approach could help unlock more of the estimated $100 billion in latent capital across the Middle East as investors and startups turn to platforms like it to efficiently transact, manage data, and access liquidity.
As private markets go increasingly digital, the company looks poised to capitalize on strong regional tailwinds. With the latest cash injection, Zest Equity is gearing up to accelerate development of tools connecting key ecosystem players and providing the rails for seamless private market transactions.