Private Markets Year in Review 2024

2024 was a year of measured recovery for the private market. Positive macroeconomic influences helped improve investor sentiment, driving a sense of cautious optimism. Secondary activity was bolstered by demand for both liquidity and access to cutting edge technologies. Here we’ll provide an in-depth look at the trends that defined the market this year.

The private markets were shaped by the contrasting interplay of economic recovery and persistent headwinds. The year began with lingering challenges for many private companies, including down rounds, a difficult fundraising environment and limited exit opportunities. Luckily, an improving macroeconomic environment, marked by long-anticipated interest rate cuts, provided a much-needed boost. These cuts not only reduced borrowing costs but also improved deal-making sentiment across the private market. The public market rallied in response, with the S&P gaining over 26%¹ this year. These factors created favorable conditions for strategic exits and set a more optimistic and “risk-on” tone for investors.

IPOs & A Focus on Fundamentals

Despite improved market sentiment, the IPO market remained subdued compared to historical highs. In the first three quarters of 2024, global IPO activity saw a 14% decline in volume and a 35% drop in proceeds year-over-year, highlighting ongoing investor caution. However, notable exceptions such as ServiceTitan, WeRide, Tempus, Reddit, Rubrik, and Astera Labs demonstrated the potential for successful exits. Venture-backed company IPOs outpaced last year from both a number (up 150%) and volume (180%) perspective.  In fact, private equity and venture capital-backed IPOs, accounted for over one-third of global IPO proceeds in the Americas. Of the 2024 IPO class, investors favored companies with strong fundamentals, specifically a delicate balance of growth and profitability. They also sought out companies that had an AI component of their business, a trend we don’t see going away.

While there were a few bright spots in the IPO market, most companies tabled IPO plans this year. Instead, they prepared behind the scenes while waiting for more economic and political certainty. For some companies, this meant hiring a new CFO or building out an investor relations team. Other companies took things a step further, either confidentially filing for a listing or filing their S-1. Venture-backed technology companies like Cerebras are anticipated to go public, having filed their S-1. This reflects a gradual resurgence in confidence. In the meantime, private market investors who have held investments in late stage companies for increasingly long periods of time are eager to recycle capital into new investments, putting pressure on companies to exit. This, coupled with employee shareholder demand for liquidity, has created a healthy pipeline of IPO hopefuls who could test the market in 2025. 

Secondary Markets Soar

As companies largely remained private, secondary market activity soared. Secondary volume hit record levels of over $140 billion, a reflection of growing investor demand for liquidity and private market access. The narrowing of the bid/ask spread, the difference between the prices at which sellers are willing to sell and buyers are willing to buy, spurred increased market activity. This increased market activity was driven by both institutional and retail investors. As of early December, the bid/ask spread on EquityZen’s platform narrowed to an average of 19%.²   

Institutional Uptick

On EquityZen’s platform, family office allocations to secondaries surged over 120% compared to the prior three-year average, signaling the growing role of secondaries in a diversified, institutional portfolio. Family offices aren’t the only ones seeing market opportunities. Storied firms like Accel and Lightspeed applied to be registered investment advisers, allowing them to deploy more than 20% of their funds to secondary investments. 

The increased demand for secondary activity prevailed on the sell-side of the market too. Institutions from venture capital firms to family offices tapped the private secondary market to sell shares of legacy investments and return capital to their limited partners. Last year, U.S. venture capitalists invested $60 billion more into startups than they collected back in returns. While traditional exits such as IPOs remained elusive for many of these companies, secondaries are a growing liquidity pathway for these investors. With over 1,200 unicorn companies globally, many at over a decade old, early investors are eager to recycle capital into new investments and turned to the secondary market this year to do so.

Retail on the Rise

Retail activity in the private secondary market also rose in 2024. On EquityZen’s platform, retail (aka individual investor) activity grew as a percent of overall transaction volume from 56% in Q4 of 2023 to 86% in Q4 of 2024.  

This is a testament to the pent up demand for industry leading private companies, which has been exacerbated by the lack of recent technology IPOs. Investors who solely invest in the public markets have lacked access to many mature technology companies that have continued growing in the private market. Like institutional investors, more individual investors are realizing that pre-IPO investments are an important component of the growth-equity allocation in a well diversified portfolio. Large institutions like Blackstone, Apollo and KKR appear keen to capitalize on the retail demand for private market investment strategies, launching their own funds to target this segment of the market. 

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Valuations Climb

Private company valuations shifted notably as companies, on average, moved from trading at steep to more modest discounts versus their last round of primary financing. This benefited the institutional investors who entered the secondary market in force in 2023 when they saw attractive buying opportunities. In January of 2024, the average private company traded at a 45% discount to its last funding round. By the end of Q3, the average company was trading at a 11% discount, a notable 34% swing.³ Valuation data from EquityZen’s Private Market Map confirms this trend. Among the Private Markets 100, we’ve seen an aggregate price appreciation of 38%.⁴

When we look a bit deeper, a few interesting trends emerge. First, a growing number of companies are trading at greater than a 25% premium to their last round of primary funding than we’ve seen since 2021. In the first quarter of 2024 we saw no companies trading at premiums this high. By Q2 and Q3 that number started to creep up, ending Q3 at 8%⁵ of all deals. As marketwide valuations continue to recover, popular and growing companies are garnering more aggressive valuations in the secondary market. Meanwhile, fewer companies are trading at steep discounts. In Q1 56% of companies were trading at 50% or greater discounts to their last round of funding. That number dwindled to 31% by the end of the year. 

2024 saw an increase in investor interest for young companies, those founded less than 5 years ago. At the beginning of the year young companies accounted for 11% of indications of interest amongst our investors. By the end of this year, that number has grown to 18%⁶, largely at the cost of interest in “middle aged” companies between 5 and 10 years old.

Industry Specific Trends

When we zoom in to look at specific industries, a few clear winners emerge. Artificial intelligence (AI), unsurprisingly, remained the most popular industry amongst EquityZen investors in 2024. Because AI is a relatively new and emerging technology, many of these companies are still young, and therefore still private. With few pure-play publicly traded AI companies, investors are turning to the private markets to access AI investments. While overall investor sentiment favored profitable companies, investors seem willing to take bets on high-flying companies that may shape future industries, specifically with the help of AI. 

Beyond AI, Information Technology, and Financial Services remained some of the most popular industries amongst EquityZen investors in 2024.⁷ Yet, it’s important to note that popularity doesn’t remain static. For example, investor interest in SaaS companies shrunk considerably in H2 versus H1 2024. Energy companies also saw notably less interest in the second half of the year versus the first half.

While secondary valuations in aggregate have increased this year, certain industries have been the largest beneficiaries of this price appreciation. Within the Private Market Map, Information Technology, AI and Fintech companies saw the greatest price appreciation⁸ with notable price increases of 836%, 539% and 178% respectively. The valuation increase seen by Fintech companies can largely be attributed to the crypto boom over the last month. The approval by regulators of a new type of bitcoin exchange-traded fund coupled with support of crypto by the incoming presidential administration helped drive this surge.

Of the 100 companies in EquityZen’s Private Market Map, AI, Media & Entertainment, and Information Technology companies have garnered, on average, the overall highest market caps. Primary funding data has shown the staggering amount of capital poured into AI companies at strong valuations.⁹ This is translating into the secondary market as well. 

Liquidity Matters

While the secondary market creates liquidity for hundreds of private companies, not all companies or industries are equally liquid. After all, each company has its own unique mix of buyer and seller interest which, when aligned, allows for trading activity. Of all the industries tracked by EquityZen’s Private Market Map, Food and Beverage and Fintech companies were the most liquid this year.¹⁰ Both buyers and sellers were able to most easily transact in names within these industries.

Closing out the Year

2024 marked a year of cautious optimism and adaptation to a “new normal” in the private market. While IPO activity remained quiet, secondaries became an increasingly popular avenue for liquidity and investment opportunities. Institutional and retail investors alike embraced new opportunities, while positive macroeconomic factors set the stage for a potentially robust 2025. As the secondary market continues to grow, we will track the key trends observed from over 45,000 transactions on EquityZen’s marketplace to arm our clients with the insights they need to make informed decisions.

Interested in browsing the private company investment opportunities available on EquityZen's marketplace?

Disclaimers: Diversification does not assure a profit or protect against market loss. Not all pre-IPO companies will go public or be acquired, and not all IPOs or acquisitions are or will become successful investments. There are inherent risks in pre-IPO investments, including the risk of loss of the entire investment, illiquidity, and fluctuations in value and returns. Investors must be able to afford the loss of their entire investment.

Footnotes:

1. As of November 27, 2024
2. EquityZen data as of December 4, 2024
3. EquityZen data as of December 4, 2024
4. EquityZen data as of December 5, 2024
5. EquityZen data as of December 9, 2024
6. EquityZen data at of December 9, 2024
7. As of December 5, 2025
8. EquityZen data as of December 4, 2024
9.  The New York Times
10. EquityZen data as of December 4, 2024