Alexandre Covello’s Post

Interesting thoughts about PE led secondaries for VC assets.

Zepto raises $350 mn in its latest funding round at a $5 bn valuation, led by Motilal Oswal’s Private Wealth division. The funding aims to attract more domestic investors ahead of its upcoming IPO. https://mybs.in/2daX3hR

"While a lot of investors want IPOs to open back up in 2024, the market conditions aren’t ideal. Interest rates are still high, making money expensive and pulling investors away from equity into bonds; valuations are still depressed from their highs of 2021 with later-stage venture investors looking at gaining little – or even losing money – if their startups were to go public now." #vcfunding #startupfunding #earlystagestartups #iponews #secondarymarket #financialnews

𝗠𝗮𝘀𝘁𝗲𝗿𝗶𝗻𝗴 𝘁𝗵𝗲 𝗜𝗣𝗢 𝗖𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲 𝗶𝗻 𝗨𝗻𝗰𝗲𝗿𝘁𝗮𝗶𝗻 𝗧𝗶𝗺𝗲𝘀 🚀 Is Your Startup IPO-Ready? Consider These 5 Key pillars! 🌟 ⏰ 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗠𝗮𝗿𝗸𝗲𝘁 𝗙𝗶𝘁 & 𝗧𝗶𝗺𝗶𝗻𝗴: Your IPO should stand out! Choose quieter market periods for better impact. 💰 𝗥𝗼𝗯𝘂𝘀𝘁 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹𝘀: Demonstrate strong revenue growth and a clear path to profitability. 🧭 𝗘𝘅𝗽𝗲𝗿𝘁 𝗚𝘂𝗶𝗱𝗮𝗻𝗰𝗲: Lean on seasoned advisors to navigate IPO complexities. 🛠️ 𝗢𝗽𝗲𝗿𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝗘𝗳𝗳𝗶𝗰𝗶𝗲𝗻𝗰𝘆: Streamline operations to boost margins and investor confidence. 📖 𝗘𝗳𝗳𝗲𝗰𝘁𝗶𝘃𝗲 𝗦𝘁𝗼𝗿𝘆𝘁𝗲𝗹𝗹𝗶𝗻𝗴: Articulate a compelling business narrative to attract investors. For an in-depth guide on navigating your startup through an IPO, check out insights from Meritech Capital's blog: https://lnkd.in/g7RBE6UH #IPO #StartupSuccess #UncertainTimes #GrowthStrategy #Financials #Communication #ManagementTeam #OperationalEfficiency #MarketMomentum #Preparation #Timing #Flexibility #InvestorRelationships #LongTermFocus #BCG #BCGX #Startup 📈 Ready to navigate the IPO waters? Let’s discuss your thoughts below! 👇

I am really excited about what's happening in the European tech scene. 🇪🇺 Secondary transactions are happening and reshaping the market. The impact is real and will keep growing. ↳ Vinted just hit a $5.4B valuation through a secondary sale. ↳ Qonto is eyeing a €5bn valuation, yet with a secondary sale. ↳ The IPO market is slow but secondary transactions are here. And here's what I like the most about it. It's coming from the top. The big money managers. ↳ Vinted's $367 million secondary share sale was led by TPG. ↳ Qonto is in talks with big names like Alkeon and KKR. ↳ And more (confidential at this point) transactions are on their way! This trend is just starting and it is here to stay. It is also happening to earlier stage companies. These transactions will help early employees and investors cash out. GPs increase their D/PI and get into carry zone. And, at last, LPs get their money back. What's not to like? #venturecapital #secondaries #liquidity

Sacra was cited in The New York Times today! Erin Griffith from the NYT discusses the tension between rising secondary volume and startups wanting to control their ownership & IPO timing. Secondary was dead from 2022 to late 2023. It's been picking up in a big way—with the NYT citing our estimate of 40% growth in secondary market volume to hit $64B in 2024. That shows the optimism (and FOMO) around companies like SpaceX, Stripe, Anthropic and Plaid, while also shining a light on the persistent issues in dealing in secondary. At Sacra, we're excited to bring research & data to the private markets which are crucial to a functioning secondary market. Check out the link to the article in the post below.

"IPO, IPO, Hooray! Profits Are So Passé JUST IN JEST If you haven’t gone public yet, please go to the back of this line and wait It seems everyone is going public these days. If you haven’t filed for an IPO yet, what are you even doing with your life? So, last week, it was your neighbour’s son who launched ‘PawPal’, a dog-walking app that also sells gourmet bones. Last you checked, it was valued at $500 mn — though it’s mostly just a list of pet-friendly parks. Gone are the days when you needed a business model or, heaven forbid, profits, something that seems to be oh-so-banal these days. Now, it’s all about potential. ‘What could we possibly do?’ is the new mantra. Business seems to be catching up with politics — minus the hokey catch lines, thankfully. Your company just needs to offer some form of vague hope that someday, somehow, money might come in. Got an idea for an app that tracks how long it takes your coffee to cool down? IPO it. Have a laundry service that’s only available on Sundays between 2 and 4 pm? Boy, sounds like a unicorn in the making. Investors don’t want numbers — they want ‘narratives’, as if Dostoyevsky’s just shifted to the Valley. Just make sure your pitch deck includes words like ‘disruption’, ‘synergy’ and, of course, ‘AI’. The goal is not to explain what you do, but to sound like you’ve single-handedly reinvented existence. In this brave new world of IPO mania, one thing’s clear — we’re all a few stock options away from la-la land." Image and content: The Economic Times

Interesting read on TechCrunch about the dearth of IPOs in VC-backed companies. Late-stage investors often negotiate a liquidation preference that is wiped out in an IPO, giving certain classes of preferred equity holders the ability to block an IPO. For example, late-stage investors in Instacart apparently did not have blocking rights or chose not to block, resulting in a 73% loss of investment for Series I investors from 2021. Its a rather strange outcome that I've written about in the past. For companies that can override their late-stage investors, an IPO effectively resets the cap table. Will we see more private company-IPO conflicts in the coming years? #VC #IPO #startupconflicts #technews Lauren Bonner Jonathan Jetmundsen

The latest edition of Marketplace / Money is now out, rounding up happenings in the marketplace space and its intersection with the investment world (VC & PE)

Sacra data has a story to tell about the market in pre-IPO startup shares: growth is back. The New York Times featured Sacra’s data in an article out today: https://lnkd.in/eAgRx5r5 The article cites Sacra to point out that dollar volume for secondary share sales in the private markets is on track to reach $64.1B this year. That’d be up from $46.1 billion last year, a 39% increase after two sluggish years. Here’s how the last three years broke down, per our data on “direct” secondary-share sales (excluding transfers of LP interests): - $55.7B for 2022 - $46.1B for 2023  - $64.1B for 2024, based on the current run rate Everywhere we look across private-market platforms that facilitate secondary share sales, we’re seeing price resiliency, narrowing spreads, and reenergized activity. A few recent IPOs here and there have also helped thaw things out. Of course there’s still a lot that could happen this year, e.g. the macro/interest rate environment isn’t exactly steady in what is also a presidential election year. But at the same time the drivers of activity aren’t going anywhere. As the NYT points out, online marketplaces to help buyers and sellers match are maturing, even as bottom-up retail demand for privately-held names like Anthropic, Stripe, and SpaceX continues to build. It's cool to see the NYT dig below the surface into pre-IPO tech markets. Reach out if you’d like to learn more about the data 🤓