What to know: 2021 private market trends
April 14, 2021

What to know: 2021 private market trends

Forge Team

Based on eye-catching market activity in 2020, we anticipated that complexity (and excitement) would continue to build within private and public markets in 2021, that private market growth wouldn’t slow down, and that new pathways to exit would inspire innovation – and that’s exactly what’s happening (so far).

Let’s take a closer look at which trends are shaping the 2021 market to date, and where we anticipate some shifts.

The private market goes up, up, up

The unicorn universe continues to grow. Within the 337 deals closed in March, 26 of the private companies gained unicorn status – more than doubling the 12 new unicorns from February – bringing the total to more than 50 unicorns year-to-date.

Meanwhile, primary VC funding continues to soar month-over-month. The Q1 total in funding registered just under $58B on the Forge platform, which nearly doubled 2020’s Q1 total of $27B.

In short, there’s no slow down in sight on the private market.

Complexity spurred by SPACs

As expected, SPACs – or blank check companies – have introduced a new kind of craze and complexity to the markets. There were 264 SPAC offerings on the Nasdaq and the NYSE raising $76.8 billion from January to mid-March, according to a POLITICO analysis, while traditional IPOs had only 74 deals and raised $30.1 billion within the same timeframe. [1]

The U.S. Securities and Exchange Commission (SEC), however, has opened an inquiry into the SPAC boom, sourcing information on how to manage associated risks with this pathway to the public market.

This could potentially contribute further to the SPAC slow down we’re starting to see, with SPAC shares declining significantly from their highs earlier this year, according to Yahoo! Finance. [2] While SPACs aren’t going away, this could start to seed an uptick in other alternative paths to exit, such as the hybrid auction method or more direct listings.

Fintech at your fingertips

Advancements in fintech continue to increase access and provide greater options for stock trading and investing for a new generation of traders and savvy professionals.

This year showed just how powerful Robinhood’s user-friendly investment technology is at engaging the everyday trader, while the latest mania around non-fungible tokens (NFTs) is both an investment opportunity and an emerging art form. NFTs work like any other speculative asset, where you buy them, hope the value goes up, and then sell them for a profit. [3]

We’re seeing an increased appetite for democratized finance today that will only lead to more innovation throughout the year and beyond, as entrepreneurs and tech gurus’ interest and innovation piques, and they continue to figure out how to better serve this shifting paradigm on both the private and public markets.

[1] Politico: Wall Street frenzy over shell companies draws attention of SEC

[2] Yahoo! Finance: The SPAC Slowdown

[3] The Verge: NFTs, explained

PLEASE READ THESE IMPORTANT LEGAL NOTICES & DISCLOSURES

The information and material presented in this article is provided for your informational purposes only and does not constitute an offer by Forge Global, Inc. Forge Securities LLC or any of its affiliates (collectively, "Forge") to sell, or a solicitation of an offer to buy any securities and may not be used or relied upon in connection with any offer or sale of securities. An offer or solicitation can be made only through the delivery of final offering document(s) and purchase agreement and will be subject to the terms and conditions and risks delivered in such documents.

This article does not constitute an offer to provide investment advice or service. Registered representatives of Forge Securities LLC do not (1) advise any member on the merits or prudence of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services. Securities referenced in this article may be offered by Forge Securities LLC, member FINRA/SIPC.

Forge Securities LLC is a wholly owned subsidiary of Forge Global, Inc. Certain affiliates may act as principals in such transactions.

Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative, involving a high degree of risk, and investors should be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks and investors should conduct their own, independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or investment advice. Accordingly, investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.

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PLEASE READ THESE IMPORTANT LEGAL NOTICES & DISCLOSURES

The information and material presented in this article is provided for your informational purposes only and does not constitute an offer by Forge Global, Inc. Forge Securities LLC or any of its affiliates (collectively, "Forge") to sell, or a solicitation of an offer to buy any securities and may not be used or relied upon in connection with any offer or sale of securities. An offer or solicitation can be made only through the delivery of final offering document(s) and purchase agreement and will be subject to the terms and conditions and risks delivered in such documents.

This article does not constitute an offer to provide investment advice or service. Registered representatives of Forge Securities LLC do not (1) advise any member on the merits or prudence of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services. Securities referenced in this article may be offered by Forge Securities LLC, member FINRA/SIPC.

Forge Securities LLC is a wholly owned subsidiary of Forge Global, Inc. Certain affiliates may act as principals in such transactions.

Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative, involving a high degree of risk, and investors should be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks and investors should conduct their own, independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or investment advice. Accordingly, investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.