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.
Private issuers with activity on the platform during the month
Live orders to buy or sell on platform
Average transaction price as % of last known funding round
Value of listings for sale on the platform
The median bid in September, quoted as a discount to last round value, remained little changed at 59.5%, notching a seventh consecutive month within a tight range around 60%. The median ask told a similar story as it declined slightly from 39.2% to 40.9%, marking the fifth consecutive month around 40%. Liquidity remains expensive and hard to find as the large gap between buyers and sellers persists.
While bids and asks changed little in the month, a significant drop in transaction price (as a percentage of the last round valuation) from 59.5% to 52.1% suggests that sellers are beginning to capitulate– after months of holding out for higher prices, sellers are accepting lower bids. Disappointing public debuts from private market darlings Instacart and Kalviyo seem to have shaken the confidence of sellers hoping to cash out after an IPO. It remains to be seen how this might affect the spread in coming months, but it is undoubtedly a strong signal to sellers that a moderate adjustment of expectations is necessary to unlock liquidity in this market.
The bright side in this data for private market participants is apparent continued stability, particularly when compared to earlier this year. While things are not going up, they appear not to be going down either, as the market has fallen into something of a holding pattern. Buyers and sellers alike should keep a close watch on the emerging IPO thaw: strong performance from those newly-minted public companies could herald a significant upward movement above the tightly-bounded range of the past few months.
The bid/ask ratio reached a new 2023 low of 0.40 in September, a slight decrease from 0.42 in August 2023. This figure provides more evidence of a robust and persistent buyer’s market, marking the lowest bid/ask ratio since we began maintaining records in August 2022.
The average bid/ask spread was virtually unchanged in September, falling marginally to 29%, down from 29.2% in August. With US treasury yields notching multi-decade highs in the public markets, a deeply challenging interest rate environment continues to limit venture capital inflows. Buyers still believe that many late-stage companies are overvalued while sellers continue to be anchored nearer to last round valuations.
OysterHR experienced a record month on Hiive with seven accepted bids for its shares. While the company has been largely quiet in the news, it has had anything but a quiet month on Hiive, with more than $3.8 million in transacted volume.
Own Company (previously OwnBackup) witnessed a lively September on Hiive amidst its rebrand and the launch of Own Discover, a product that will enable users to apply their historical SaaS data to unlock insights and accelerate AI innovation. There were a total of five accepted bids in the month, making it one of the most active securities on the platform.
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