Deal volume grows 74% and exceeds $10 Billion for the first time
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NEW YORK AND SAN FRANCISCO, Aug. 08, 2018 (GLOBE NEWSWIRE) — The Nasdaq Private Market, LLC (NPM) has published its 2018 Mid-Year Private Company Report, which summarizes private company liquidity activity for 33 company sponsored liquidity programs on the NPM platform for the first half of 2018.
As the private market continues to rapidly expand and evolve, NPM has remained at the forefront of helping late stage venture backed companies provide liquidity to their shareholders. In the first half of 2018, many notable pre-IPO companies leveraged NPM’s market expertise and technology to complete ever more complex secondary transactions. An increasing number of these offers were made by third party investors seeking to build or increase their shareholdings in our clients. For these large transactions, companies increasingly leverage NPM’s ability to customize its platform, provide hands-on operational expertise, and manage complicated funds dispersal at settlement, which NPM has now done for nearly 200 company sponsored liquidity programs involving over 22,500 sellers since 2013.
Beyond the unprecedented growth in deal volume and dollars transacted, there were some other interesting trends. For the first time, over 60% of the transactions on NPM were completed by third party buyers as compared to those completed through a company buyback. Employee liquidity and retention continued to be the main focus of the companies using NPM to facilitate transactions, with 85% of all deals involving employee shareholders. Despite the high dollar volume transacted so far this year, however, the median deal size was $18.3M. This data points to the continued trend that late stage companies of all sizes are looking to provide liquidity, whether it be a few million dollars to a small employee base or broad based liquidity to all of their shareholders.
In addition to its core tender offer services, NPM also saw increased demand for its ability to bring institutional investors to the companies it works with. As the market continues to expand, NPM expects its additional services, like capital introduction and expanded technology offerings to handle RSU liquidity, to continue to grow. Given current market conditions, NPM anticipates following up its strong 1H with record 2H deal activity and market interest, expanding on the $18.5B+ that NPM has already processed since 20131.
“The private company secondary market continues to experience exponential growth” said Eric Folkemer, Head of Nasdaq Private Market. “Visionary companies are actively aligning their liquidity strategy with company goals and providing solutions for their founders, investors and employees. As a market leader and trusted brand in sponsored programs, we are fortunate to innovate alongside of these forward thinking companies to keep pace with the growth and evolution of this market.”
About Nasdaq Private Market:
The Nasdaq Private Market, LLC is the premier liquidity provider to private companies. Whether a company seeks to optimize an eventual IPO or remain private permanently, Nasdaq Private Market provides comprehensive technology and capital market support to meet its needs. For certain eligible investors, Nasdaq Private Market is a place to discover and engage with some of the most exciting private companies. The information contained herein is provided for informational and educational purposes only. None of the information provided is an offer or solicitation to buy or sell any securities, or to provide any legal, tax, investment or financial advice. Investing in private company stocks is speculative and involves a high degree of risk. You must be prepared to withstand a total loss of your investment. You are strongly encouraged to complete your own independent due diligence before investing in private company stock, including obtaining additional information, opinions, financial projections, and legal or other investment advice. The Nasdaq Private Market, LLC is not: (a) a registered exchange under the Securities Exchange Act of 1934; (b) a registered investment adviser under the Investment Advisers Act of 1940; or (c) a financial or tax planner, and does not offer legal advice to any user of the Nasdaq Private Market website. Technology services may be offered by The Nasdaq Private Market, LLC’s subsidiary, SecondMarket Solutions, Inc. Securities-related services are offered through NPM Securities, LLC, a registered broker-dealer and alternative trading system, and SMTX, LLC, a registered broker-dealer, each of which is a member FINRA/SIPC and wholly-owned subsidiary of the Nasdaq Private Market, LLC. Transactions in securities conducted through NPM Securities, LLC or SMTX, LLC are not listed or traded on The Nasdaq Stock Market LLC, nor are the securities subject to the same listing or qualification standards applicable to securities listed or traded on The Nasdaq Stock Market LLC. Data collected from the SecondMarket platform may include transactions conducted through current and former affiliates of SecondMarket. To learn more, visit www.npm.com.
1 Past performance is not an indicator of future results or market activity.
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