Q1 2025 Venture Market Insights

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Strong start to the year.

The first two months of 2025 saw a continuation of the strong activity observed in Q4 2024, characterized by significant demand growth and corresponding appreciation in leading names such as SpaceX, Databricks, OpenAI, and others.

Economic and market uncertainty ahead.

However, activity began to slow in March, with a further concentration observed in the most liquid names. The economic uncertainty causing significant disruption in the broader capital markets appeared to also begin influencing private markets- albeit less dramatically, as evidenced by a decline in activity toward the end of the quarter.

Overall returns still very Positive.

Overall returns for the quarter were the strongest observed since the correction in 2022. This performance was driven to a significant extent by company-led primary and secondary activity in AI, Robotics, and Aerospace.

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PM Insights Indication Volumes by Size Bucket

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_{(*) PM Insights does}_not_{use contributions with volume less than $1M in our composite calculation.}

PM Insights is the leading market data provider for private company shares- delivering unmatched clarity, precision, and independence. Built exclusively for institutions requiring the most accurate, objective, and actionable data, research, and market insights.

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Private & Public Market ROI

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Private vs. Public YTD ROI

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Private Sector YTD ROI

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_{The PM50 Growth tracks the performance of the 50 most active private names observed in the secondary market. It is an equal-weighted index, rebalanced on a monthly basis.}

_{This rebalancing of constituents over time gives way for more active names to participate in what we observe as "market performance," and in a more appropriate manner than static selections and weightings criteria.}

Private Market: Sector Level

|| Sector-level analysis as of March 31, 2024

PM50 Growth index is up 23.5% and volatility of its ROI is 124.6%.

AI sector has the highest ROI at 68.5% and highest volatility of ROI at 510.1%.

Health sector has the lowest ROI at 0.8% and lowest volatility of ROI at 7.9%.

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PM50 Growth Quarterly ROI

Private market ROI is on the rise.

PM50 Growth data points to a continued rebound in the private market with a 23.5% ROI in Q1 2025, a 11.4% increase from Q4 2024, 12.1% ROI, maintaining the positive momentum since Q3 2023.

Though it should be noted that growth was concentrated to the first two months with performance plateauing in March, with broader capital markets turmoil appearing to affect private markets also.

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Note that PM Insights added several brokers with substantial historical datasets, resulting in an update of the entire historical data. This caused changes to past ROI figures, although the overall trend remains largely unchanged.

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Q1 Sector ROI

100% of PM Insights active indices are green in Q1 2025.

Unsurprisingly, the AI sector significantly outperformed. Companies such as OpenAI, Figure AI, and Anthropic continued capitalizing on the AI hype with major raises early in the year. Other sectors, notably Blockchain (boosted by the crypto rebound), also experienced growth due to increased fundraising at improved valuations and heightened secondary activity among prominent names anticipating a return of big tech-led IPOs. However, this outlook, alongside broader global economic conditions, became notably less certain, leading to stagnating returns in March.

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Quarterly Sector Volatility

Higher ROI volatility in Q1 2025 with an average of 74%.

ROI volatility is calculated as the average ROI movement over the 90 days prior to April 1, 2025.

Overall volatility increased this quarter compared to the previous one, with the highest-performing sector (AI) also among the most volatile.

Conversely, lower-performing sectors, including Hardware, Entertainment, Health, and Analytics (all with modest positive ROIs), showed relative stability.

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6M Average Bid & Ask Spread per Sector

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Median Revenue Multiple per Sector

Revenue multiples for the most active sector benchmarks show growth - but for how long?

As previously reported, most active private sectors experienced sharp multiple declines from their 2021 peaks, stabilizing from 2023 through H1 2024, before climbing again in H2 2024. This upward trend continued into Q1 2025, with multiples rising most significantly in AI and notably in other sectors as well.

However, it remains uncertain if this growth will persist amid increasing economic uncertainty, which may result in a return to the tighter capital conditions observed during the 2022/2023 correction.

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^Note:^{The brief spikes in the data are due to new funding rounds that occured}

Sectors

Headquarters

CEO

Activity

Q1 2025 activity is a story of two halves.

PM Insights observed continued strong activity early in the quarter, extending the trend from Q4 2024, though increasingly concentrated among the most liquid names. However, from late February onward, activity declined further, becoming even more concentrated in top names, with a noticeable drop observed in March.

This slowdown largely coincided with increased volatility in broader capital markets, driven by economic uncertainty related to recent shifts in US trade policy.

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Mean Volume per Indication Type

Average bid-side volume increased compared to Q4 2024, while mean offer-side volume remained relatively flat.

Observed trade volumes, however, significantly declined. Although overall volumes were slightly higher quarter-over-quarter, shrinking trade sizes raised concerns among some contributing brokers, who worried the market could be entering another period of instability characterized by widening spreads, lower trade volumes, and reduced trade completion rates due to tighter capital markets amid general economic uncertainty.

Additionally, others noted that significant primary and company-led secondary activities diverted some institutional activity away from secondary markets.

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Quarterly Bid & Ask Volume

Bid volumes continued to rise coming closer to parity with observed offers in Q1 2025

Q1 2025 recorded the highest proportion of observed bid-side volumes since Q1 2021, primarily driven by strong demand for the most liquid companies and those in the AI sector.

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Top 10 based on Bid or Ask Volume in Q1 2025

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Databricks & xAI: Data & AI led as the most sought-after names in secondary markets, although SpaceX and Bytedance followed closely behind.

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SpaceX & ByteDance: The two private behemoths continued to dominate sell-side volumes, with the recent rise in SpaceX's valuation prompting some investors to lock in significant gains.

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Top 10 Companies Based on Overall Volume

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SpaceX & ByteDance are still leading the charge.‍

Elon Musk now controls two of the three most active companies by volume in secondary markets, with xAI joining SpaceX and Bytedance at volumes exceeding $1B. Databricks was close behind. Overall, concentration among top names increased in Q1 2025, with four companies now surpassing the $1B mark.

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Top 10 based on Institutional Contributions in end of Q1 2025

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_{* Price (USD) estimated based on secondary market activity observed by PM Insights. Valuation is estimated based on said price and share count from state filings and/or news in the public domain. Note that share count in calculations may change as new filing documents are obtained.}

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Quarterly Percentage Change in Share Price

Figure AI soaring

With AI hype continuing to capture investor attention and capital, Figure AI fully capitalized by announcing a funding round at over 10x its previous (and fairly recent) valuation, quickly spurring secondary market activity.

Other notable gainers included Animoca (boosted by favorable crypto market conditions), ShieldsAI (benefiting from its strategic position at the intersection of AI and defense technology- both highly topical), Addepar (seen successfully capturing growth among alternative capital managers), and Groq, the AI-focused chip manufacturer.

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Proportion of Change in Valuation

91% of companies in PM Insights’ universe are trading higher than the valuation they achieved in the rounds prior.

On the other hand, 65% of companies traded at a discount compared to their most recent round, while only 35% achieved positive returns. Secondary market trades still generally occurred below primary valuations, except in the AI sector and a select few highly sought-after names in sectors like Defence Tech.

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Average Change in Valuation

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A significant dichotomy emerged between valuations in recent rounds compared to previous ones, with some companies achieving substantially higher valuations while others experienced notable down rounds. Timing and sector-especially AI- being critical factors.

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However, upward swings were less pronounced when comparing PM Insights' current implied valuations to recent primary rounds, while valuation declines for some were even steeper- though this trend has improved over the past two quarters.

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PM Insights Price vs Mutual Fund Price

Historically, mutual funds have marked their positions in late-stage private companies at or above the most recent primary funding round valuation.

As markets cooled, many mutual funds were slow to reflect the broader sentiment, resulting in PM Insights' valuations (based on institutional secondary market activity) increasingly falling below mutual fund marks for those companies.

However, this trend appears to have reversed in H2 2024 (with filings typically delayed by a quarter), aligning with broader market recovery and improved dynamics, as mutual funds' valuations now more closely match secondary market pricing.

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