Private Market Reports

The private market began to reflect the momentum in the public markets. Moderate gains across bids, listings, and the average transaction price signalled growing optimism.

AI shines in liquidity-strapped private market The private market struggled for direction for most of 2023 on the heels of a significant correction in the second half of 2022. A dearth of liquidity pulled buyers and sellers in opposite directions, resulting in wide bid/ask spreads of around 28% for most of the year. VCs and hedge funds hesitated to allocate their dry powder in the absence of exits, and sellers became more motivated by the bleak prospects for traditional liquidity events.  As a result of this illiquidity, trades were fewer and farther between, and typically could only happen when buyers were willing to step up to a seller’s ask. The average transaction price of 60% of last round value in 2023, which is much closer to the average seller’s ask than the average bid, demonstrates this phenomenon. AI stood out as a bright spot, with high demand for names like Cerebras, Databricks, OpenAI, Cohere, Anthropic, and others. Euphoria briefly gripped the market as Klaviyo and Turo traded heavily in anticipation of IPOs, but excitement waned after mixed performances in public listings. A bumpy ride to nowhere Flight to quality Investors huddle in safer harbours Pathways to liquidity Most companies are allowing transfers Hiive 2023 most active securities Hiive surges in a weak environment Despite the weak market backdrop, the Hiive platform surged, as orders, listings, crossed trades, and completed transactions all increased three to six times. We are grateful for this ringing endorsement by the market of our platform and product and we feel well-positioned to capitalize on the many opportunities that 2024 will bring. Private companies and their shareholders alike are demanding liquidity, and secondary marketplaces have a crucial role to play in unlocking the full potential of the private market.

Buyers remained in short supply in October as the bid/ask ratio on Hiive fell to an all-time low of 0.34, with listings outnumbering bids by nearly 3-to-1. The average transaction price was steady at 53.9% of the last round valuation (translating to an average discount of 46.1%), reflecting limited change in the market overall. The bid/ask spread tightened slightly by 2.4% from the previous month to 26.6%, as seller expectations continued their downward trend of the past twelve months. While it would not be completely unrealistic to anticipate some recovery in enthusiasm on the buy-side as central banks begin to signal pause in their rate-hiking cycles, the possibility of a short term market rebound remains remote.  Amidst a generally lacklustre market, Hiive maintained a solid upward trajectory on several fronts. The number of accepted bids continued to climb month over month, exceeding 200 in October as the total value of listings for sale exceeded the $2 billion mark for the first time ever. Additionally, October’s 3,263 live orders to buy or sell on the platform across 611 different pre-IPO companies were also all-time highs, signalling growing depth and breadth of our marketplace.

September brought good news for buyers as the average transaction price on Hiive fell significantly to 52.1% of the last round valuation. This all-time low average transaction price on the platform represents a deterioration from the previous several months, which saw deals take place near 60% of the last round price. Liquidity remained hard to come by as the bid/ask spread persisted at cyclical highs. September’s buyer’s market was accompanied by more strong growth for the Hiive platform. For the first ever month, there were over 3,000 live orders to buy or sell on the platform, across nearly 600 private late-stage companies. The total value of active listings for sale on Hiive ticked closer to $2 billion, and monthly accepted bids hit another all-time high.

A choppy August in the public markets gave no clear direction to private markets. After a buoyant July, the average transaction price fell slightly, back below 60% of the last funding round value. Buyers and sellers continued to express  divergent views on the market’s direction, keeping the bid/ask spread near the highs of the cyclical downturn. However, the market’s lack of direction did not hinder the continued growth in activity on the Hiive platform. The number of private companies with buy or sell activity on the platform during the month notched another all-time high, along with nearly 3,000 orders to buy or sell. The value of active listings for sale during the month also reached an all time high near $2 billion. Finally, accepted bids (matches between buyers and sellers) on Hiive remained at all time high levels..