Private Market Update: May 2021
May 17, 2021

Private Market Update: May 2021

Forge Team

The exit pipeline remains strong with a growing interest in and popularity of cryptocurrency and FinTech companies alike, from both institutional and accredited investors and the growing crowd of retail investors. Here’s a look back at the last month and what to know moving forward.

New day, new tech IPO

The IPO market continues to persevere as Compass, Coinbase, Zymergen, and UiPath all hit the public markets in April, averaging north of a 25% return since their respective IPO dates.

Following in the footsteps of companies such as Spotify, Slack, Palantir and Roblox, Coinbase opted for a direct listing, which offers reduced hype cycles, less volatility, cost-effective methods that cut out underwriters, and usually, the ability to avoid lockups. This approach benefits shareholders and employees by allowing them to sell shares immediately at a market-based price.

The company’s highly anticipated exit did not disappoint. It’s market cap reached over $100 billion shortly after trading began in the public market. [1]

The exit pipeline remains robust as well. Streaming data platform Confluent and FinTech firm Blend Labs both filed for an IPO last month, as did Didi Chuxing, the Chinese ride-hailing giant. The Didi Chuxing IPO is anticipated to be one of the largest tech IPOs this year and one of the biggest Chinese IPOs in the U.S. since Alibaba listed on the New York Stock Exchange in 2014. [2]

Investor activity on the rise, FinTech at the forefront

Investor activity on the Forge platform increased over 30% month-over-month in April (measured by the number of indications of interest placed), while the unique issuer count narrowed as investor interest concentrated on certain well-known companies.

To no surprise, FinTech companies continue to dominate. With Coinbase’s exit last month, Kraken, a bitcoin and cryptocurrency exchange platform, had the highest number of bids placed on the Forge platform, followed by Robinhood.

The popularity of FinTech unicorns and newly public FinTech entities is only expected to rise, especially as they increasingly become an integral component in streamlining outdated systems and creating new opportunities. In short: we’ve only scratched the surface of what technology will do to radically transform financial systems for the benefit of businesses and consumers.

[1] TechCrunch

[2] CNBC

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