A choppy August in the public markets gave no clear direction to private markets. After a buoyant July, the average transaction price fell slightly, back below 60% of the last funding round value. Buyers and sellers continued to express divergent views on the market’s direction, keeping the bid/ask spread near the highs of the cyclical downturn.
However, the market’s lack of direction did not hinder the continued growth in activity on the Hiive platform. The number of private companies with buy or sell activity on the platform during the month notched another all-time high, along with nearly 3,000 orders to buy or sell. The value of active listings for sale during the month also reached an all time high near $2 billion. Finally, accepted bids (matches between buyers and sellers) on Hiive remained at all time high levels..
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, quoted as a discount to last round value, remained stuck near cyclical lows at 58.4% last month, marking its sixth consecutive month in this range.. The median ask tightened slightly to a 39.2% discount, but also remained near the long-term lows of recent months. This persistent and gaping spread between buyers and sellers suggests that liquidity remains scarce and costly. .
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.
Median bid and ask (Sep 2023 trailing 12 months)
In August 2023, the bid/ask ratio on Hiive fell significantly to 0.42, down from 0.52 in the previous month. This marks the lowest bid/ask ratio so far in 2023, indicating that there is no end in sight to this strong buyer’s market.
The average bid/ask spread rose to 29.2%, notching a 4-month high. The market’s inability to bridge or even narrow this yawning gap confirms that the current higher interest rate environment has severely constrained the supply of capital into the venture capital asset class. Sellers are holding out for a continued market rebound while buyers take cues from a choppy August in the public markets.
Omada saw upwards of $3 million transactions agreed upon in the month. This jump in activity coincided with the company earning the prestigious Utilization Review Accreditation Commission (URAC) telehealth accreditation for Musculoskeletal Care, making it the first fully-virtual healthcare provider to do so. Several buyers placed bids for the company, making it one of Hiive’s most active securities after months of relative inactivity.
FourKites shareholders accepted a number of bids as demand for shares in the logistics and supply-chain startup bucked a recent negative trend in the space. This momentum in the secondary market comes as the company announced an expansion of its leadership team to support its growth and global expansion.
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