, which is set to launch in a week, is helping to revive interest in one small, battered corner of the financial market: stakes in companies that are set to go public soon.
But while rising, interest remains subdued. Private companies traded at a discount to their last fundraising round of about 58 per cent in July, and while that is down from 61 per cent in May, it is up from 52 per cent in June, according to private market trading platform Forge.That discounted pricing provides an attractive investment opportunity for some investors, although the universe of potential new listings has shrunk dramatically, weeding out weaker candidates.
“Investors are no longer willing to pay gigantic multiples against future cash flows,” said Linqto president Joseph Endoso. “Those things happened in the last bull market, but I think hard lessons have been learned.”The safer bets are sizeable companies with a proven track record of operations, and a clear route to profitability, if they aren’t already there. With that as the new barrier for entry, not many of the IPO hopefuls of the last few years would pass muster.