As we close out the first quarter of 2025, we continue to feel enthusiastic about the prospects for the secondary private share market. While there have been some notable recent VC-backed IPO announcements, the IPO market has not come “roaring back, as some had predicted. The theme of companies remaining private for longer remains intact, and secondary market liquidity is becoming more important for both investors and employees.
Highlights:
- During 2023 and 2024, our NPM Private Market Tracker, which tracks the estimated average price performance of the 170 names we follow closely in our internal Tape D data, indicates that the secondary private company share market underperformed the S&P500 by 61%.
- In 2024, total proceeds raised through secondary price tender offers exceeded VC-backed IPO volume.
- Valuations are recovering. In Q4 2024, 24% of secondary share volume facilitated by NPM company-structured liquidity programs priced at a premium to the last preferred round vs. 0% in Q4 2023.
- Volumes are growing. Across 2024, there was an 83% YOY increase in the number of private company auction programs facilitated by NPM.
- Funding cost expectations have moderated slightly, with the one year forward expected 10-year US Treasury yield falling to 4.3% currently from 4.7% at YE2024 (Source: Bloomberg). Lower rates have historically been beneficial for private markets.
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