EquityBee, which helps employees exercise their stock options before they expire, has bagged $6.6m to support its move into the US market.
The funding round was led by Group11, with additional support coming from Battery Ventures and LocalGlobe.
Over the past year, the company has been supporting employees in Israel with their stock options and is now moving into the US market.
The company claims that employees of startups in the US are forgoing around $60bn in unexercised stock each year. The issue is, when an employee leaves their company, they have a limited time period to make use of their stock benefits before they expire.
Costs of exercising stock options can hit hundreds or thousands of dollars, it said. This forces a lot of employees to not take action on their equity rights.
EquityBee connects startup builders with an investor community so the employees can obtain all the capital they need to exercise their stock options and pay the taxes. This enables the employee to become a shareholder of the startup. Employees and the investors share a portion of any future exit gains.
The company’s investor community includes backers from around the world, including family offices, funds and accredited investors which are looking to invest into companies previously inaccessible.
Group 11 founding partner Dovi Frances said, “The US is home to over 525,000 tech companies employing over 11.2 million tech workers of whom 6 million work for private tech companies. While inconceivable, as it stands today, a vast amount of these workers does not get to exercise or finance their stock options thus lose annually about $30bn.
“This is why we invested in EquityBee. EquityBee aims to solve this massive market failure and help millions of employees realize what is rightfully theirs. The solution the company offers is a no brainer for all parties involved: the employees, the startup companies employing them and the investors using EquityBee.”
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