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August 2023
Private Market Report - August 2023
Signs of Stability
Although positive developments in the fight against inflation have buoyed public markets, private markets remain weak and primary dealmaking continues to suffer. That said, the secondary market has seen some semblance of stabilisation. Renewed investor confidence has narrowed bid/ask spreads to their lowest levels since Q1, transactions on Hiive in July occurred at higher valuations on average than in each of the previous three months.
Despite the broader market malaise, Hiive has continued its strong growth — 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 reached all-time highs in July 2023.
Marketplace highlights
471
Private issuers with activity on the platform during the month
2,654
Live orders to buy or sell on platform
61.1%
Average transaction price as % of last known funding round
$1.56Bn
Value of listings for sale on the platform
Market momentum
The median ask moved slightly downward month-on-month, while the median bid was virtually flat since the previous month. This has resulted in a mild improvement in the average bid/ask spread— a promising sign for liquidity, and further evidence of rapprochement between buyers and sellers.
Furthermore, there was an improvement in the average transaction price as a percentage of the most recent known funding round, with buyers and sellers finding common ground at an average discount of just 38.9%. This suggests that buyers might be re-pricing some of their target companies to the upside.
Bid/ask ratio
Rising to 0.52, the bid/ask ratio notched its third consecutive month-over-month increase. While still reflecting a robust buyer’s market, this continued trend indicates a gradual return to a more balanced market, putting more pricing power back into the hands of sellers.
Average bid/ask spread
The average bid/ask spread saw its largest month-over-month decrease since February 2023, with a 1.4% decrease from the month previous. When viewed in concert with the continued decline in transaction discounts to the last primary fundraising round, this paints a materially more optimistic liquidity picture and offers hope for a continued thaw in the months to come.
Noteworthy flows
Databricks was the most active name on Hiive in July, with over $15m worth of bids accepted. Secondary pricing has reached YTD highs amid continued positive press and expectations of an IPO. It remains to be seen if The Information’s disclosure of the company’s hefty operating loss in the past fiscal year will dampen demand.
Huntress investors were able to pick up common shares at a ~15% discount to the most recent funding round (May 2023) on the Hiive platform. The company had previously reported doubling revenues in 2021 and 2022.
Cerebras Systems has continued its 3-month trend higher as demand heats up. The company recently signed a ~$100m deal to deliver AI supercomputers to UAE-based tech group G42.
Hugging Face saw bids above its most recent primary funding valuation. Broadly, AI remains in high demand on Hiive amid sustained expectation of its secular potential.
Alto Pharmacy had an active July, seeing 6 accepted bids in the month as the healthtech company eyes a new funding round. The company recently reported roughly $1 billion in annualized revenue and a reach of over 41 million clients in May 2023.
Outreach remained one of the most active securities despite conducting a third round of layoffs in 2023. The company has had nearly 20 accepted bids on Hiive this year.
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