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As we close out the second quarter, it’s not just summer temperatures that are heating up. The private market is too. There is a sense of renewed vigor in the market, which has demonstrated remarkable adaptability despite macroeconomic headwinds. Early Q2 saw significant volatility, largely driven by the sweeping "Liberation Day" tariffs introduced in early April. However, the market quickly adjusted to a “new normal”. As the quarter closes, the VIX has returned to a notably low 17, from its peak of 52 in April.
Against all odds, several venture-backed technology companies decided to go public in Q2. After an initial slowdown, which led private companies like Klarna to pause their listing plans, activity picked up markedly in June. While overall IPO activity in Q2 trailed Q1 in both number of IPOs and proceeds, June brought significant optimism. IPOs by Caris Life Sciences, Omada Health, Circle, Chime, and Voyager Technologies demonstrated the resilience of the market. Circle Internet Group (NASDAQ: CRCL) showed standout performance, leading the quarter in IPO proceeds of $1.1 billion and delivering the biggest two-day pop of an IPO since 1980. The stock has since risen over 147%.1 Confidential S-1 filings from Gemini, Stubhub, Figma and Navan, among others show continued pipeline growth.
Beyond IPOs, the venture capital landscape saw an uptick in exit activity. Global exit values rose to $114.9 billion in Q2, the largest total in almost three years. However, venture deal activity as a whole declined quarter over quarter by over 20%, both from a deal count and deal volume perspective.2 When it came to fundraising, artificial intelligence continued to lead the market. AI startups received 53% of global venture capital dollars in the first half of the year, according to Pitchbook. While the staggering $50 billion raised by AI startups in Q2 outpaces nearly all historic quarters, it marked a decrease from Q1 which saw a record $71.9 billion raised by AI startups. Software-as-a-Service (SaaS) startups raised the next highest amount of funding thus far this year, followed by Manufacturing, Fintech and Healthtech companies.
As IPO optimism increased and the demand for all things AI continued, private secondary activity picked up. Following a record-breaking $160 billion in transaction volume in 2024, secondary transaction growth is anticipated to continue, with projections of reaching an annual transaction value of $300 billion within the next decade. The secondary market is actively easing liquidity pressures stemming from the $4.4 trillion in value tied up in over 1,200 global unicorn companies. It is estimated that 71% of VC exits in 2024 came from secondaries, a sign of their growing role in the broader venture ecosystem.
Coupled with high investor demand for industry-changing private companies in industries from AI to fintech and defense, market activity continues to grow. So, which private companies and industries led in the private markets in the second quarter? For our Secondary Spotlight, we analyzed thousands of data points from EquityZen’s platform to identify the key trends that drove the private secondary market. Let’s dive in.
A Rebound in Investor Interest
Indications of interest in the private companies saw a steep 38% downturn in April, following the market volatility and risk-off appetite that resulted from tariff announcements. This trend, however, was short-lived. As the public market recovered and both IPO activity and private funding rounds picked up, investors sentiment rebounded. Indications of interest rallied through the back-half of the quarter, seeing a 56% uptick in June. This marked the highest level of investor indications of interest since March of 2023.
The Crypto Craze
Many of the most popular industries in Q2 aligned with what we saw in Q1. Artificial intelligence, information technology and fintech maintained their popularity. More than seven AI companies raised more than $100M in Q2, including Glean, Scale AI, Anysphere, and SandboxAQ. Meanwhile, National Security & Defense Tech, an industry that broke into the top ten for the first time in Q1, continued its upward trajectory. Defense tech companies Mach Industries, Helsing and Anduril all raised funding in Q2, likely bolstering demand. For those three companies alone, indications of interest surged, over 80% from May to June.
Crypto became a top ten industry in Q2. Regulatory tailwinds and broader market adoption coupled with Circle’s hugely successful IPO drove investor interest in stable coins particularly. Hundreds of EquityZen investors invested in Circle pre-IPO at prices as low as $2 per share. While not necessarily indicative of investment outcomes for other crypto investments, FOMO is a strong driver for investor interest. Corporate giants like Amazon and Walmart are both reportedly exploring issuing their own stablecoins, further validating the crypto market.
Not only were AI companies the most in demand, but they were also the most actively traded in Q2.3 The next most actively traded industries included Emerging Energy and Enterprise Software companies.
The Most Popular Companies
The most popular companies amongst EquityZen investors remain a who’s who of the private market. The top ten companies span industries from space travel to artificial intelligence, crypto, and defense.4
As the market continues to evolve, new innovative companies emerge and make the news. In Q2, a new set of companies saw their popularity soar. From Austin-born boot brand Tecovas to Gemini, the crypto marketplace backed by the Winklevoss twins which confidentially filed to IPO, each company has made headlines this quarter, driving popularity.
Decreasing Discounts
In Q2, 21% of secondary trades happened at a premium to a given company's last round of primary funding. We haven’t seen more than 20% of deals trading at premiums since Q2 of 2022. This shows an overall shift towards higher valuations over the last few quarters.
As more companies continued to trade at a premium, we saw the average discount decrease as well. In Q2, the average company traded at a 13%5 discount to its last round of funding. This is a notable reduction from the 28% average discount in Q1 of 2025 and indicative of an upward trend in valuations. This reflects growing investor appetite for the most innovative private technology companies.
Emerging Energy Comes as a Premium
Across all industries, emerging energy companies saw the most deals trade at a premium to a given company’s last round of funding. News like Meta’s investment in nuclear power from Constellation Energy or TAE Technologies' Series E extension may have spurred investors sentiment in the emerging energy market more broadly. Meanwhile, almost all Media and Food & Beverage companies traded at a discount to their last round of funding in Q2.
The New Kids on the Block
Last quarter we saw an uptick in investor interest for “middle aged” companies, closer to the levels we saw in 2022 and 2023. This quarter, however, marked a notable move of investor interest to younger companies. A quarter of investor indications of interest went to companies less than five years old. We haven’t seen that level of interest in younger companies since 2018.
This trend makes sense as artificial intelligence remains the most in demand industry amongst EquityZen Investors. Given the nascence of AI technology, many of these companies are still young. Each week we hear of new AI startups raising funding, many growing rapidly into unicorn valuations within a matter of years if not months. Investors are eager to access these innovative companies that are transforming nearly every industry.
Conclusion
The private market not only weathered the volatility of early Q2, but made up for lost time with a flurry of activity. From the continued strength of funding rounds to several successful IPO exits, investor sentiment remains positive for fast-growing technology companies that are shaping the future. Secondary transaction activity continued to grow, further establishing its place in the market - not only as a means of trading shares, but a vital tool for market data.
Curious to learn more about the fast-growing companies in the pre-IPO market? Start exploring today.
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