Nasdaq Private Market
 | |
| Company type | Private |
|---|---|
| Industry | Finance and Marketplaces |
| Founded | 2004 (originally Restricted Stock Partners, Inc.) |
| Founder |
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| Headquarters | New York City, U.S. |
Area served | Global |
Key people | |
| Products | Marketplace Services Financial Data |
Number of employees | 100+ (2009) |
| Parent | Nasdaq, Inc. |
| Website | www |
Nasdaq Private Market (NPM) operates as a secondary trading platform specializing in private company equity, catering to issuers, brokers, shareholders, and investors alike. Since inception, NPM has enabled transactions exceeding $40 billion, involving over 400 private enterprises and upwards of 100,000 participants. The platform provides various transaction methods such as tender offers, auctions, block trades, and tailored company marketplaces. In 2021, NPM transitioned into an independent entity following a spin-off from Nasdaq, backed by strategic investments from Silicon Valley Bank, Citi, Goldman Sachs, Morgan Stanley, and Allen & Co.
Originally known as SecondMarket Solutions prior to its acquisition by Nasdaq in partnership with SharesPost, the company was rebranded as Nasdaq Private Market. Nasdaq took full ownership of NPM in October 2015. The organization traces its roots back to its founding as Restricted Stock Partners, Inc.
History
Established in 2004 by Barry Silbert, SecondMarket initially focused on providing liquidity solutions for restricted securities tied to public companies. By 2008, the firm broadened its scope to include auction-rate securities, bankruptcy claims, limited partnership stakes, structured financial products such as MBS, CDOs, ABS, whole loans, private company shares, government IOUs, and even bitcoin.
In 2007, the company secured Series A financing from Pequot Ventures. Follow-up funding rounds comprised a $15 million Series B in 2010 aimed at supporting expansion into Asian markets and a $15 million Series C round in 2011 led by The Social+Capital Partnership. Valuation increased from $150 million in 2010 to $200 million by 2011.
The World Economic Forum recognized SecondMarket as a Technology Pioneer in 2011. During this period, private-company transaction volume surged from $100 million in 2009 to $400 million in 2010. The platform levies transaction fees ranging between 3% and 5%. Registered users grew significantly from approximately 2,500 in 2008 to over 53,000 by early 2011.
In 2015, Nasdaq acquired Second Market Solutions—a direct competitor to its own Private Market platform—and subsequently rebranded it as Nasdaq Private Market.
Restricted Securities in Public Companies
SecondMarket’s original market segment concentrated on restricted securities within public companies by enabling privately negotiated deals that unlock liquidity within this multitrillion-dollar asset class.
Bankruptcy Claims Market
In June 2008, SecondMarket expanded its offerings through the acquisition of Trade Receivable Exchange, Inc. (T-REX), which was then the largest online auction platform for bankruptcy trade claims, thereby broadening its market capabilities.
Market for Limited Partnership Interests
In February 2009, SecondMarket introduced a platform dedicated to trading limited partnership (LP) interests. This service facilitates the transfer of ownership stakes in private equity, real estate, hedge funds, and fund of funds, allowing limited partners to assign their future capital commitments to other investors.
Markets for Structured Products
April 2009 marked the launch of trading venues for collateralized debt obligations (CDOs) and mortgage-backed securities (MBS), expanding the range of financial instruments available through SecondMarket.
Whole Loan Trading
Also debuting in April 2009, the whole loans marketplace supports buying and selling of residential, commercial, and specialty loans. This market accommodates both performing and non-performing loans, covering single loans as well as entire loan portfolios.
Private Company Stock Exchange
SecondMarket unveiled its private company stock exchange in April 2009, providing a regulated environment for trading debt and equity instruments issued by private firms. This platform offers early investors and employee shareholders an opportunity to exit their positions in a controlled manner prior to initial public offerings or mergers and acquisitions.
Trading Government IOUs
SecondMarket developed a market for registered warrants (government IOUs) issued by state governments. When California issued such warrants to creditors in 2009, SecondMarket established a trading venue to improve liquidity within this specialized segment.
Bitcoin Investment Trust
The Bitcoin Investment Trust (BIT) is a privately held, open-ended trust whose valuation is directly linked to bitcoin prices. Custodianship is provided by the NASDAQ Private Market (formerly SecondMarket), with Ernst & Young conducting financial audits. Managed by Grayscale—a subsidiary of SecondMarket and part of the Digital Currency Group—the trust represents the firm’s strategic move into digital asset investment. Grayscale also oversees the Ethereum Classic Investment Trust.
In February 2014, SecondMarket announced intentions to create a regulated bitcoin exchange based in the United States and planned to spin off its bitcoin-related operations into an independent entity, signaling its expansion and diversification within cryptocurrency markets.
See also
- Exhilway private capital market
- Campbell Lutyens
- Probitas Partners
- Triago