Seedrs, the operator of secondary market for private equity investments has reported impressive demand for shares in its portfolio companies since launching 12 months ago. In that time, Seedrs has achieved 2,990 investor exits in what was previously an illiquid asset class.
Until Seedrs launched its secondary market, the long-term nature of early stage private equity meant that shares tend to be illiquid and investors would have to wait for an exit event such as an IPO or a sale of the business before seeing any returns on their investment.
The latest trading cycle in June saw 601 share lots traded, boasting a 918 per cent increase from the markets first trading cycle in June 2017. Trading activity has been increasing month by month, with the value of all trades now just shy of GBP1,000,000.
Seedrs Secondary Market launched in beta mode with three key restrictions in place; set pricing, a cap at GBP1000 and only existing shareholders could buy or sell. Eight months after launch, Seedrs lifted one of these restrictions by opening up the secondary market to all investors, whether previous shareholders or not. This saw a 300 per cent increase in trading activity.
Evolving the secondary market further, Seedrs is now looking into auction pricing, removing the GBP1000 cap and incorporating new technologies in its development to improve its efficiency and speed of execution.
Investors have been achieving impressive returns on Seedrs Secondary Market over the past twelve months. One of Seedrs’ earliest funded companies Veeqo, an e-commerce business, first raised back in 2013 and is now providing its early investors with up to 19x returns on Seedrs Secondary Market following its recent Series A.
Seedrs alumnus Revolut recently announced its unicorn status, with its latest funding round valuing the fintech company at USD1.7 billion. This came just eight months after the company’s fundraising round on the platform, already giving Seedrs investors a 3.5x return and exit opportunity on the secondary market.
Thomas Davies, Chief Investment Officer at Seedrs, says: “We’re delighted with the success of the Seedrs Secondary Market so far. Seedrs always strives to be at the very forefront of technology, leading the way in the sector with innovative products and services. We have some exciting plans for the evolution of our secondary market and feel we’re only just getting started.”
“We’ve seen increasing levels of trading every month, demonstrating that the demand for a fully functioning secondary market absolutely exists. Our portfolio of high-growth exciting businesses such as Revolut, Airsorted and Perkbox is sought after and people who missed out on their initial Seedrs funding round are using our secondary market to get in.”
