Market Insight Update: Eclectic Nature of Secondary Market Participants

Given the vast set of opportunities to buy or sell securities within the secondary market, there are a myriad of participants that are present on both the buy side and the sell side.

Buy Side participants are listed below. They seek exposure to late stage growth investments.

Institutional growth stage VC firms / hedge funds - VC firms with a mandate to invest in late stage growth name via primary rounds. Given the size of these later stage round (Series C+), they tend to have $100M+ AUM. They participate in the secondary market by doubling down on their current portfolio company at discounts to lower their cost basis.

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Kirat Lall
Bolt was performing a tender offer at a $300 million valuation for its preferred shareholders which represents a 97% markdown in valuation.

Feb 19, 2024

  • Bolt was performing a tender offer at a $300 million valuation for its preferred shareholders which represents a 97% markdown in valuation.

  • Cohesity acquired Veritas’ data protection business in a deal that would value the combined business unit at $7 billion.

  • Epic Games received a $1.5 billion investment from Disney.

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Kirat Lall
Market Insight Update: Trimodal Secondary Market Landscape

Upon the onset of 2024, the secondary market has evolved as outlined below.

1)    There are select momentum driven companies (SpaceX, OpenAI, Anduril, Redwood Materials, Hugging Face, Cohere, etc) in the Generative AI and aerospace and defense industries where access to investment opportunities is paramount and there is less emphasis on fundamental analysis. Investor demand significantly outshines available supply. Given that secondary deals are largely blocked in these names and liquidity is limited, investors and sellers can transact via a SPV (Special Purpose Vehicle).

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Kirat Lall
Byju’s was trying to raise $200 million in a rights issue at a roughly $225 million valuation

Jan 22, 2024

  • Byju’s was trying to raise $200 million in a rights issue at a roughly $225 million valuation.

  • Circle Internet Financial confidentiality documents for its upcoming IPO.

  • DailyPay raised $175 million ($100 million in expanded secured credit and $75 million in new equity) at a $1.75 billion pre-money valuation.

  • Flexport raised $260 million in a convertible note from Shopify.

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Kirat Lall
Market Insight Update: Lack of Transparency in the Private Markets

The private markets are full of abundant opportunities to invest in later stage growth narratives. While several investors pursue the flight towards quality names that have a $10B+ valuation and have significant amount of news coverage, other investors seek to invest in esoteric names where the risk is more but there is higher potential upside.

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Kirat Lall