Startup secondaries — when private companies enable existing shareholders like VCs and employees to sell some of those shares — have picked up this year.
“I would say that we are probably experiencing the peak in the number of secondaries that we're seeing in the tech industry,” Michael Podolny, a San Francisco-based partner at law firm Latham & Watkins, told Sifted in September.
Many companies have put off fundraising over the past few years (usually an opportunity for existing shareholders to cash out) and other exit events, like IPOs, have been few and far between.
As a result, plenty of investors are thirsty for liquidity, while current and former employees of many highly-valued tech companies want to reap the rewards of their labour sooner rather than later.
Meanwhile, other investors want in on the upside when those scaleups do eventually sell or list. Several secondaries-focused funds have launched this year — including Isomer Capital, Launchbay Capital and Flywheel Capital — to do just that.
This demand for secondaries doesn’t look set to stop anytime soon. “[We] are getting more instructions on secondaries," Shing Lo, another partner at Latham & Watkins, told Sifted. "I think it goes to show the trend is here to stay and there's going to be more to come."
Sifted’s tracked close to 50 secondary transactions in Europe so far in 2024, including at several of the continent’s most closely followed scaleups, such as digital banks Revolut and Monzo, as well as secondhand clothes marketplace Vinted.
We’ll update this tracker as and when we discover new secondary transactions at private European tech companies. Have we missed any? Let us know here.
