Caplight

Jefferies reported record-breaking H1 2024 for #secondaries. What does it mean? I love comparing the Jefferies Global Secondary Market Review to what Caplight tracks in the #preIPO direct secondary market. The various asset classes within alt. secondaries are correlated (volume & pricing), so insights shared by Jefferies are relevant to all market operators. A link to the full Jefferies report is in the comments. ?? The data: Jefferies reports on global secondaries, encompassing all alternative assets (private equity, real estate, venture, etc.) and focuses on GP/LP liquidity solutions. Caplight tracks single-asset venture secondaries... basically a subset of Jefferies' universe. Summary: - Global secondary volume was $68 billion in H1 '24, a 58% increase yoy. This was in line with the 50% increase we saw on direct venture secondaries. - GP led deals made up 40% of total volume. - ? Single asset continuation funds represented ~60% of total GP-led volume (a shift from 2023 when multi-asset deals were majority of volume) ?. - Venture represented 12% of total LP volume (unchanged from 2023). As usual, Buyout was 70% of volume. - ?Venture LP pricing lagged all other asset classes. On avg. trades cleared at 30% discounts to NAV (vs. 94% for Buyout funds) ?. - Venture pricing commentary: "While there was demand for revenue-generating, later-stage assets with a clear path to exit, valuations were still viewed as inflated amid limited improvements in fundraising, and buyers were primarily bidding for venture funds as part of a diversified portfolio." ?? What does this mean for pre-IPO venture secondaries? Jefferies confirms what we're seeing in pre-IPO secondaries. Volume is way up yoy, but the market is still concentrated on a few late-stage companies w/ a path to IPO. The bid/ask spread for all other VC-backed companies is still very wide. If you're planning on opportunistically buying in top-10 names, expect competitive processes & chasing sellers. If you're planning on selling non-top-10 names, expect long price discovery processes and conservative pricing against last round. ??

Grateful for the partnership w/ PitchBook's research team. Weekend reading recommendation: Brendan Burke and Matthew Nacionales's analysis of the disparity in fundraising for GenAI companies based on core product. Thanks for including Caplight's secondary market data throughout the report. As the report mentions, we've seen a rush to fund GenAI businesses offering a 'Foundational Model' versus 'Ancillary/Other GenAI' since 2023. That trend extends to secondary markets, as Foundational Model GenAI players were of the most actively traded companies that we track in 1st H'24. BUT, will the trend continue? We're seeing a strong pickup in *buy interest* from secondary market investors going into 2H'24 for businesses included in the 'Ancillary/Other GenAI' bucket, including companies building key chip, cloud infrastructure, and application technology to power the GenAI economy. Buy interest is usually a leading indicator in the secondary market of where future deals will close. The market we cover is betting GenAI pick & shovel-type plays will offer gold returns. Want access to the underlying data Pitchbook's team used for this report? Signup here: www.caplight.com Full Pitchbook report here: https://lnkd.in/gr3awK5g

Enjoyed this analysis by Rebecca Szkutak at TechCrunch. Thanks as always for including Caplight! I agree with your take: sophisticated LPs put cash to work in 2023 backing investment managers who have a mandate to buy secondaries opportunistically. Secondaries-focused funds were one of the best-performing strategies from a fundraising perspective in 2023 on a relative y-o-y basis. That means managers have cash to deploy in secondary-land. So it's no surprise we're seeing secondary market transaction volume surge, deal sizes increase, and bid-ask spreads tightening. And it's keeping folks that track the space very very busy ?? https://lnkd.in/gn_rVY_q.

Really enjoyed Jeff Kauflin's profile piece on the current state of late-stage private Fintech. Of course, I love that Jeff and Forbes used Caplight Data in their analysis (thanks Jeff!). But my takeaway is more than a Caplight commercial. Late-stage, VC-backed Fintech valuations were of the hardest-hit sectors from peak to trough between Jan '22 and June '23. Based on institutional-sized secondary market *closed transactions*, many of these companies remain valued 50-70% below the valuations they received in '21 primary rounds. But the *green shoots* are there, as indicated by Jeff. 2yrs of reining in expenses, plus accelerating/re-accelerating growth, plus public comp appreciation, has resulted in investor excitement and a flurry of recent secondary market upward price movements. Stripe and Ramp stand out as bright spots in the space. If you want more on Jeff's analysis, pay for Forbes! If you want more of the underlying data that powered it, DM me. https://lnkd.in/gjjVtF2p

Thank you Shailesh Chitnis for featuring Caplight in The Economist's Weekly Edition. I appreciate the perspective: AI is a bright spot on an otherwise bleak picture for global Unicorns. "Private valuations in the so-called secondary market are below those at the latest fundraising round for more than four-fifths of unicorns, according to Caplight, a data provider." The silver lining: pre-IPO valuations stopped declining last year and, in most cases, are on the rise. https://lnkd.in/eBAc_PFw

Thanks for shining a light on some of the reasons why pre-IPO liquidity makes sense Marc Vartabedian and The Wall Street Journal. Caplight is happy to be featured here alongside our peers. We're proud of the role we play in bringing data and transparency to the otherwise opaque pre-IPO secondary market. https://lnkd.in/gKhHkJZM

It's easy to doom spiral these days. Especially in Venture and VC secondaries-land. If you look under a rock right now you'll find another reason to be worried about the 2024 market environment. A 'will they/won't they' Fed, global geo-political risk, skittish IPO calendar, and a looming US election are all easy things to point to when rationalizing waffling through another year. But at Caplight, to start 2024, we're choosing optimism. We collected $1 billion of closed VC secondary trade data last year. There are gems in the numbers, so we decided to share our findings here: www.caplight.com/insights. We noticed a clear rebound in market activity starting in June last year that picked up momentum before the holidays. Holding aside macro risk, we expect more VC secondary deals in 2024 than in 2023. The opportunity is explained as follows: 1) Secondary funds (PE + VC) had the best fundraising performance last year of all categories. Investors want managers to find attractive secondary opportunities. *(market demand force)* 2) Dry powder amongst funds remains near all-time highs. How much longer can funds hold off on actually deploying capital raised? *(market demand force)* 3) Many funds that invested in pre-IPO companies w/ active secondary markets are 8+ yrs old, creating pressure to return capital in a DPI-starved environment. *(market supply force)* We've built tooling to help investors and brokers in the pre-IPO secondary market understand the market opportunity. Let me know if you want a demo of the latest. We love illuminating this opaque market, and we have much more to do. See you out there!

Carta Scrapped Secondaries – Good News, You Can Still Access the Secondary Ecosystem One of the big news stories over the last week was Carta ending its secondary market product CartaX, following controversy over its use of customer data. This may be minor bad news for Carta (even though the total rev. from the product was est. to only be ~$3m/yr), but candidly has minimal to no impact on GP/LPs ability to access secondary investment opportunities and investors/employees/founders' ability to sell their private market positions. Accessing the secondary markets is quite easy today via marketplaces like Hiive, aggregators like Caplight, funds like Industry Ventures and SPVs. The infrastructure and practices need improvement, but “accessing” this ecosystem is relatively easy. Part of the reason is that the secondary market has ballooned over the last 15 years, which has led to an enormous number of entrants building tools, services and marketplaces to facilitate these secondary transactions. According to a report from Industry Ventures the global addressable market for secondaries has grown from an estimated $25B in 2010 to an estimated $100B+ today. So as an LP/GP looking to buy these positions and as a founder/employee/existing investor looking to sell, what are your options? Today, Last Money In is published a post covering: - Brief history of the VC secondary market? - Detailing the different ways to access the secondary ecosystem as an investor/shareholder - Why massive fragmentation exists in secondaries and how that may change? - Discussing the emergence of the SPV/syndicate model to access secondaries - Pro/cons from each segment of the market - And more P.S. → one of the best ways to access secondaries is via venture and angel Syndicates/SPVs. There are many active syndicators frequently running allocations for secondary investments including into highly sought after secondaries such as SpaceX, Anduril Industries, Brex, Canva, Kraken Digital Asset Exchange, Circle, Ramp and many others. — Powered by Sydecar, Last Money In is the most actionable venture capital newsletter. Written by Zachary Ginsburg and Alex Pattis, global leaders in VC, we’ll teach you how to become more informed VC investors and gain access to the VC ecosystem, both as a fund manager and limited partner

Join us live tomorrow at 3pm EST to learn more about what happened with Carta and what the future of private markets liquidity will look like. We're excited to host an incredible group of panelists with deep knowledge of both Carta and the secondary market: Arjun Sethi?is the co-founder and Chief Investment Officer at?Tribe Capital. He's an investor in Carta and has served on their board since 2017. Hari Raghavan?was previously COO at Forge and he wrote one of the?most widely shared breakdowns?of the recent Carta situation. Hari is also GP at?The Autopilot Fund. Javier Avalos?is the co-founder and CEO of?Caplight?which is an active secondary trading platform. He previously served as SVP of Marketplace at Forge. This event is brought to you in partnership with our friends at Sacra :) RSVP link in first comment below.