RuleZero has raised Rs 10 crore in funding from Zerodha’s Rainmatter Capital, IndusLaw, Reddy Futures, and Kris Gopalakrishnan.
Established by Satish Mugulavalli and Srinivas Katta in 2019, RuleZero’s platform handles ownership data, automates share issuance processes, and offers tools to track and verify cap tables of startups.
“Shares are the building blocks of companies. Today, once you decide whom you want to issue shares to, there’s a complete process that goes on and it’s entirely manual. We are automating this entire process and will make the cap table a system of intelligence”, said Katta.
In its first stage of growth, which Katta stated will be for the next 12 months, RuleZero is planning to automate the processes for share issue, share transfer, ESOP plan generation, and ESOP management. It will also be able to certify cap tables of startups that utilize its platform.
In the second phase, the company will develop products to facilitate secondary transactions of unlisted securities, enabling and providing liquidity to early investors and employees of startups.
Mugulavalli said, “The holy grail for an early-stage investor in a company was when the company went public, but now with companies taking 8-10 years to go public, their investment is locked in, which eventually impacts the future flow of capital. We’re looking at this problem of how to create liquidity transparently and have started creating the building blocks to get there.”
Commenting on the development, Kris Gopalakrishnan said, “By automating and standardizing compliance, data flows, and contracts between founders, investors, and other parties, they (RuleZero) will speed up the innovation cycle. This will result in freeing up the founding team’s time from administration, data checks and negotiation, and more time to run their business.”
RuleZero is looking to reduce inaccuracies in cap tables, help founders and the management recognize the complexity of liquidation preference, certify cap tables to reduce the time for transactions where complete attention is not needed, and automate the entire ESOP issuance and management process.
The company intends to utilize the freshly raised capital for product development and marketing and is planning to focus on acquiring clients in India first. It claims to already have a few customers.
RuleZero seems to be an amazing tech platform offering innovative services to startups. Under the expertise and rich experience of its talented founders, I’m sure the company will prosper in the coming time. My best wishes to the team of RuleZero.Shishir Gutpa, Founder and CEO, StartupLanes
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