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2022 Mid-Year Private Market Report
As Public Markets Retreat Private Market Valuations Return to Pre-Pandemic Levels
The dynamics in the private secondary market have changed dramatically in the first half of 2022 from the volume and valuation highs seen in 2021. Private companies face many of the same headwinds as their public company peers, dealing with rising interest rates, inflationary pressures, recession concerns, geopolitical developments, tight labor markets, supply chain disruptions, and shifting consumer sentiment.
However, it appears that investors are waiting for markets to stabilize or are only willing to invest at substantial discounts to last year’s valuation levels. Companies are interested in offering secondary programs to meet their shareholders’ ongoing liquidity needs but are often challenged with a mismatch in pricing expectations. Lower willingness to participate in these transactions has depressed the volume of private secondaries and inverted the median price from par to a discount of the last preferred round. Private company prices on Nasdaq Private Market (NPM) appear to have returned to their pre-pandemic levels.
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2022 Private Market Highlights and Trends
Recurring liquidity programs more common for late-stage companies
Secondary valuations and deal cadence return to pre-pandemic levels
Auction activity jumps as late-stage companies entertain custom transactions aligned with company liquidity goals