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July 2023
Private Market Report - July 2023
Mid-year malaise
The private market remained weak in June with no significant improvement in liquidity. Average transaction prices continue to take place at deep discounts to last primary funding valuations in spite of a slight tick upward. That said, there are some signs of renewed buyer confidence as the bid/ask ratio increased for the second month in a row. As a measure of the balance between supply and demand, this could suggest the start of a gradual recovery in the pre-IPO market.
Despite the general malaise of the private markets, the Hiive platform continues to expand as the total value of securities listed for sale, the total number of live orders, and the number of private issuers with buy/sell activity on-platform all continue to trend upwards.
Marketplace highlights
420
Private issuers with activity on the platform during the month
2,288
Live orders to buy or sell on platform
56.7%
Average transaction price as % of last known funding round
$1.56Bn
Value of listings for sale on the platform
Market momentum
Median bid and ask
The median ask persisted in its downward trajectory since February as sellers continue to adjust their expectations to align with the current private market environment. Despite this, there remains a significant disparity between initial seller and buyer expectations.
Interestingly, with the concurrence of a declining median ask price in recent months and a slight rise in the median bid, the bid/ask spread has narrowed. This suggests that liquidity is rising and is another potential sign that the market bottom is in. Only time will tell if this is indeed the case, but recent evidence of a thawing IPO market, and the emergence of bids at a premium to the last round in certain names are promising signs.
Bid/ask ratio
The bid/ask ratio in June continued to reflect a strong buyer’s market. That said, we’re beginning to observe a moderate return of buyers as the market recorded a second consecutive month of improvement, with the bid/ask ratio increasing by 0.03 over the course of the month.
Average bid/ask spread
The average bid-ask spread remained mostly flat in in the month of June with a 0.3% increase month over month. However, if early signals are correct and buyers are truly returning to the market, we could see further improvements to market liquidity in the next few months.
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