Growth-stage private companies are now performing worse than the Nasdaq

It works both ways.

When public equities began to sink in value last year, valuations for private companies initially maintained momentum, before plunging dramatically. Now the Nasdaq is starting to recover, but shares for privates aren’t. At least, that’s what pricing activity on the secondary market is telling us.

While the price of startup shares may not officially drop or go up in value until a formal financing or liquidity event, there’s still price discovery to be had in the meantime. Institutions, investors, and employees buy and sell shares on the secondary market—through brokers. That means that there’s still a spread between the selling and buying price, and that we get a good idea of ​​what the demand for those shares is looking like behind the scenes.

Independent data company ApeVue, which pulls data from nine separate brokers that trade secondary shares for institutions, tracks the 50 most actively-traded companies in the private market on a benchmark it calls the ApeVue50. As you could imagine, share prices have lost a chunk of value throughout this year. As of the end of July, the index was down 28.3% from the beginning of this year, and it’s now performing worse than the Nasdaq, which closed the month of July down nearly 21% from January levels. Here’s a look:

That intersection in July—where those two lines overlap—is a moment worth pointing out, as it’s a meaningful indicator that the private markets are performing worse than the public ones.

“All through quarter one and quarter two, the Nasdaq has underperformed the ApeVue50,” says Nick Fusco, CEO of ApeVue. “And then only in July did the Nasdaq begin to outperform it. So we’re seeing that the private companies are now down worse than the Nasdaq.”

Interestingly, not all companies are having a bad year on the secondary market. Shares of blockchain technology solutions company ConsenSys, which had raised a whopping $450 million in venture funding at a $7.1 billion valuation in March, are trading nearly 57% above what they were at the beginning of this year. And shares of Elon Musk’s SpaceX, which is reportedly seeking to raise $1.7 billion in capital, are up 16.8%. You can’t say as much for the other 13 most actively traded companies—namely Klarna, Kraken, Stripe, and Bolt.

I’ll add that not all sectors are created equal, as you can see from these sector-specific ApeVue indices:

The data isn’t perfect: Not all private companies are actively traded on the secondary market, and ApeVue doesn’t pull share prices on companies where less than $1 million worth of shares are exchanging hands. But it’s still a worthwhile indicator of what things are looking like under the hood, which is this: Still bad.

When will growth stage companies start to recover, you might ask?

“I’m not going to be the one to predict the bottom,” Fusco says.

Who has lost the most money in a single day? It’s a question you may get asked while playing Trivial Pursuit, and here’s your answer: Michael Saylor. The founder of MicroStrategy, a business intelligence and analytics company that went public in 1998, lost $6 billion of his personal wealth after his company became ensnared in an accounting scandal that sent the stock plunging 62% in a day. But Saylor seems to be enchanted by a wild ride, rather than shy away from it, and he’s betting the future of his $500 million revenue company on Bitcoin. He’s become one of the cryptocurrency’s biggest promoters, and is now stepping back from his role as CEO after 30 years to focus on the company’s “Bitcoin acquisition strategy and related Bitcoin advocacy initiatives” as MicroStrategy’s executive chairman. You can read more about it, and whether or not this will be the move that sinks Saylor once and for all, in this wild feature by my colleague Shawn Tully.

See you tomorrow,

Jessica Mathews
Twitter: @jessicakmathews
Email: [email protected]
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Jackson Fordyce curated the deals section of today’s newsletter.

VENTURE DEALS

Longroad Energya Boston-based renewable energy developer, raised $500 million in funding from MEAG and Morrison & Co’s Infratil and NZ Super Fund.

Talon Cyber ​​Securitya Tel Aviv-based secure browser provider, raised $100 million in Series A funding. Evolution Equity Partners led the round and was joined by investors including Ballistic VenturesCrowdStrike’s Falcon Fund, Merlin Ventures, SYN VenturesCrowdStrike co-founder and CEO George Kurtz, Lightspeed Venture Partners, Sorenson Ventures, and Team8.

Savannaha Malvern, Pa.-based financial software company for banks and fintechs, raised $45 million in Series A funding led by Georgian.

Axioa New York-based cyber risk quantification solutions company, raised $23 million in Series B funding. ISTARI led the round and was joined by investors including Distributed Ventures, IA Capital GroupAxio chairman and former BP CEO Bob Dudley.

Bena London-based employee benefits platform, raised $16 million in Series A funding. Atomico led the round and was joined by investors including Cherry Ventures, DN Capital, Seedcampand others.

Vetteda San Francisco-based product search engine company, raised $14 million in Series A funding. Insight Partners led the round and was joined by investors including Index Ventures, Bling Capital, Golden Venturesformer Meta VP of commerce Shiva Rajaramanand others.

Boissona New York-based non-alcoholic beverage retailer, raised $12 million in seed funding. Connect Ventures and Blue Scorpion Investments led the round and were joined by investors including UFC fighter Francis Ngannou, Midnight Venturesand Red Krypton.

Flow Securitya Tel Aviv-based data security platform, raised $10 million in seed funding. Amity led the round and was joined by investors including GFC, Amdocs Venturesand other angels.

SEngine Precision Medicine, a Seattle-based precision oncology company, raised $10 million in Series A2 funding. The Washington Research Foundation led the round and was joined by investors including Alethea Fulcrum Fund, Vincere Capital Biotech, Bangarang Groupand others.

Vorian East Palo Alto, Calif.-based digital B2B inventory management platform, raised $10 million in Series A funding. The Factory led the round and was joined by investors including Greylock, E2JDJ, MKT1and Mollie Stone’s Markets.

Nanoa Hanoi, Vietnam-based earned wage access provider, raised $6.4 million in pre-Series A funding. Openspace led the round and was joined by investors including Partech Partners, Tekton Ventures, KVision, IT Farma, Sketchnote Partners, Golden Gate Ventures, FEBE Ventures, FJLabs, Venturra, TO Ventures, ACE & Companyand Goodwater Capital.

Footprinta New York-based identity verification platform, raised $6 million in seed funding. Index Ventures led the round and was joined by investors including BoxGroup, Operator Partners, Lerer Hippeau, Palm Tree Crew, Not Boring Capital, K5and others.

Territorya San Antonio-based education technology company, raised $4.4 million in seed funding led by Comet.

Stackwella Boston-based digital investment platform, raised $3.5 million in seed funding co-led by Fenway Sports Group president Michael GordonWS Development CEO and chairman Jeremy Clarkand The Kraft Group.

Ottonomy.IOa Brooklyn, NY-based autonomous robot delivery company, raised $3.3 million in seed funding led by Pi Ventures.

PRIVATE EQUITY

Thomas Bravo agreed to acquire Ping Identitya Denver-based intelligent identity solution provider, for approximately $2.8 billion.

SyBridge Technologiesbacked by Crestview Partnersacquired Calframax Technologies, an Oldcastle, Ontario-based precision tooling market company. Financial terms were not disclosed.

WindRose Health Investors acquired a majority stake in BPD, a Boca Raton, Fla.-based hospital and health system-focused marketing solutions provider. Financial terms were not disclosed.

OTHER

Strathcona Resources agreed to acquire Serafina Energya Calgary-based oil explorer, for C$2.3 billion ($1.8 billion).

Envoy acquired OfficeTogether, a San Francisco-based desk reservation and scheduling startup. Financial terms were not disclosed.

Infinite Assets acquired Super Bit Machine, a Santa Monica, Calif.-based gaming studio. Financial terms were not disclosed.

Integrity Marketing Group agreed to acquire Gladstone Wealth Partners, a Boca Raton, Fla.-based wealth management firm and registered independent advisor. Financial terms were not disclosed.

PT Holdings acquired Commercial Kitchen Parts & Service, a San Antonio-based commercial kitchen equipment repair services provider. Financial terms were not disclosed.

Tandym Group acquired Longford & Company, a Boston-based technology consulting and executive search company. Financial terms were not disclosed.

Tegus acquired Channelist, a New York and Vancouver-based public company data and analysis platform. Financial terms were not disclosed.

IPOS

Al Ansari Exchangea Dubai-based currency exchange platform, is considering an initial public offering in Dubai early next year, according to Bloomberg.

FUNDS + FUNDS OF FUNDS

JC Flowers & Coa New York-based private investment firm, raised more than $1.1 billion for a fifth fund focused on sub-sectors of the financial services industry, including banks, insurance and reinsurance, specialty and consumer finance, asset management and financial technology and securities firms. .

PEOPLE

Binance Labsthe venture arm of crypto exchange Binance, promoted Yi He as head of the venture arm.

Quona Capitala Washington, DC-based venture capital firm, hired David Mathewson as chief operating officer and partner. Formerly, he was with SEAF.

Red Arts Capitala Chicago-based private equity investment firm, promoted Chris Hull to vice president.

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