PUBLISHER: Market Xcel - Markets and Data | PRODUCT CODE: 1566333
PUBLISHER: Market Xcel - Markets and Data | PRODUCT CODE: 1566333
Global equity management software market is projected to witness a CAGR of 13.00% during the forecast period 2024-2031, growing from USD 701.55 million in 2023 to USD 1865.03 million in 2031. Market growth is influenced by a series of key drivers. The number of startups looking for effective solutions in managing equity and the trend of employee stock options and equity plans show the need for strong management instruments to attract and retain employees. In addition, increased regulatory compliance towards equity and taxation compels companies to opt for reliable software solutions. Technological advancements in AI and machine learning, more specifically, improve analytics and reporting. Market globalization presents strong demands for scalable solutions to its international operations. The requirement of transparency in equity allocation and investments in private markets triggers an increased demand for management tools. Shift towards cloud-based platforms increases access and collaboration due to growing concerns about data security, ensuring proper secure handling of sensitive information. Finally, strategic partnerships and acquisitions among software providers keep expanding service offerings and market reach, hence leading the sector to grow.
Equity management software is a digital solution that carries out equity-related activities by a company in the form of owning stakes tracking, stock option administration, and maintenance of cap tables. It streamlines compliance, reporting, and valuation processes to efficiently handle equity compensation and ownership structures. The software is necessary for a startup or an established firm to ensure the right equity management and transparency. In July 2024, Ledgy, Europe's leading equity and share plan management software, joined forces with ZEDRA, an Active Wealth specialist, across the world. The partnership between Ledgy and ZEDRA would further enhance the convenience and speed of share settlement service among public companies. This development marks the latest within Ledgy's drive to expand solutions for public companies, becoming a perfect complement to private markets' existing services.
Growing Need for Real-Time Analytics to Drive Market Growth
Rapid growth is being recorded in the equity management software market, which mainly has a high demand for real-time analytics. Organizations are looking to optimize their equity compensation and sharpen the edge on financial reporting, making availability of data and analytics instant, the prime mover. Real-time analytics are essential as they allow companies to act quickly by making decisions based on sound information, keeping them responsive to market changes and regulatory requirements. With the increased reliance on remote work and distributed teams, tools that help with cooperation and a degree of transparency between various stakeholders become more important. In August 2024, Carta Inc., a California-based technology company, launched Carta Total Compensation, an important milestone in compensation management, available to all companies using Carta for cap table management. The new offering allows private companies to get critical equity and salary benchmarks so they can make informed, data-driven compensation decisions.
As businesses operate across many jurisdictions, complex equity management arrangements become a more robust reason for advanced software solutions that offer a panoramic view of performance and compliance. This trend is supplemented by growing awareness of the importance of employee engagement and retention, where, in the case of equity plans, real-time data shall play a huge factor in affecting workforce satisfaction and productivity. Consequently, equity management software that incorporates real-time analytics will lead the market, allowing organizations to provide the agility needed to thrive within a very competitive landscape. With demand booming, there are big opportunities for software programmers in the process of designing and perfecting software.
Advancements in Technology and the Shift Towards Digitization to Boost Market Growth
Increased digitization, along with technological innovation, gives rise to significant equity management software market growth. Companies are adopting digital transformation, which in turn leads to seeking solutions that enhance efficiency and process streamlining. Technologies such as artificial intelligence and machine learning provide valuable tools for deeper insights and predictive analytics, hence fostering informed and data-driven decision-making. This digital shift allows real-time monitoring of equity plans and simplifies compliance with updating regulations. Moreover, cloud-based equity management solutions seamlessly facilitate working flexibility. In 2023, Altvia Solutions LLC, a software company and Passthrough in the United States, launched OnboardingBridge, the very first solution that integrates a CRM with an investor onboarding system. This innovation enables general partners to deliver a top-tier investor experience.
An increasing preference for user-friendly interfaces and mobile apps and greater interaction with employees toward improving user experience and engagement are some other drivers speeding the market trend. In this context, the equity management software market is rapidly innovating and being adopted into business strategies to be an element of contemporary business strategy. By taking control of these new technologies, companies position themselves to be ahead of the curve, thus adapting to the fast pace of economic change.
Startups Segment to Dominate the Market Share
The startup segment will be more dominant going forward as emerging ventures increasingly recognize the need for effective equity compensation strategies. Start-ups tend to be more agile and open to adopting new technologies, which enables them to take advantage of sophisticated software solutions that simplify equity management processes. Today, with talent attraction and retention on the center stage, they focus equally on equity compensation as an integral element of their employee engagement and retention policies. In August 2024, Peachscore teamed up with Gust Inc., a New York software company, to roll out a new, data-driven virtual accelerator designed for early-stage startups. It provides equity-free support, tailored guidance, and basic tools necessary for the founders to get through their critical first 48 months.
In addition, most startups benefit from venture capital funding, enabling them to invest in the latest software that renders the operations much more effective and compliant. This means that when the market evolves, the demand for solutions that are user-friendly and scalable will be led by the startups experiencing rapid growth and changes in needs. For such businesses, the availability of real-time analytics and insights in equity plans shall be of great importance in enabling data-driven decisions. The desire to be agile, efficient, and satisfied helps position the startup sector as among the driving forces in determining the future for equity management software, promoting new practice improvements and better user experience.
North America Dominates Equity Management Software Market Share
North America is expected to dominate the market share as the region is known for its high technological innovation with a strong economic environment. Besides, key players are concentrated, creating a competitive landscape of established and dynamic startups to encourage the growth of advanced software solutions tailored to diverse needs within businesses. North American organizations can manage equity compensation plans with the utmost efficiency through a strong financial infrastructure and regulatory system. All these software solutions are upgraded with frontline technologies as artificial intelligence and cloud computing improve possibilities in real-time analytics and user experience. With businesses focusing on agility and efficiency, the demand for equity management tools will grow significantly and strengthen North America's market leadership position.
In August 2024, Global Shares Inc., a software company in the United States, released the Total Grant Statement, allowing participants to check their equity portfolio. Participants can view and print a PDF of the Total Grant Statement through the portal. The statement shows a detailed aggregate of a participant's equity holdings in a summary view to have a clear picture of their preferred currency.
Asia-Pacific is emerging as a significant region in the equity management software market due to rapid economic growth, digital adoption, and flourishing startup ecosystem, owing to the expansion of businesses in countries, such as China, India, and Australia, looking for effective equity management strategies that will enable them to attract and retain talent. As there is more awareness and movement towards digital solutions in operations, there is a quest to become more efficient.
Future Market Scenario (2024 - 2031F)
Increasing attention to employee engagement and retention is expected to foster a higher demand for efficient equity management applications.
The move toward the online world will accelerate the use of cloud-based software, facilitating greater availability and collaboration.
Expansion of businesses beyond borders is expected to increase the need for equity management solutions stimulated through the provision of regulatory environments, leading to market growth in the forecast period.
Key Players Landscape and Outlook
The competitive landscape of the equity management software market is dynamic and diverse. Established players coexist with innovative startups and leading firms, often providing one-stop-shop solutions encompassing cap table management, equity plan administration, and compliance. They benefit from the strength of their brand recognition and large customer bases. Entry firms have specifically focused on niche markets with user-friendly interfaces that appeal to the requirements of smaller-sized and startup businesses. The integration function is the most predominant aspect of human resource and payroll systems as firms try to streamline their operations and, thereby, increase efficiency. Besides, the factors of increasing awareness of compliance during remote accessibility force competition, compelling companies to innovate continuously and provide better customer support to cope with market demands.
In June 2024, Carta Inc. allied with Cap Advisory, one of the prominent accounting firms based out of Singapore. Specializing in accounting, tax services, and business advisory of more than 300 SMEs and startups from 20 varied industries, Cap Advisory will have exclusive service by Carta as their selective software service provider.
All segments will be provided for all regions and countries covered
Companies mentioned above DO NOT hold any order as per market share and can be changed as per information available during research work.