Table of Contents

Executive Summary

Reported Holdings as of July 31st, 2020:

  • Reporting holders marked up private portfolios 7.6% in July, with a better than 4:1 advance-decline ratio. Positive momentum grew this second consecutive month of gains, with July’s move higher outpacing June’s 3.5% appreciation.
  • Sentiment up:
  • Sentiment down:

ZX Market Update since July 31st, 2020:

  • Demand for late stage private companies grew in September, with ZX bid volume outstripping ZX ask volume almost 2:1.
  • September ZX transactions priced from a 0% discount to a 26.5% premium to most recent financings.

Heat Map: July 31st, 2020 Reporting Period

7.6%

Appreciation/Depreciation of All Reported Holdings1

12.7%

Average Mark-Up/Mark-Down Across All Reported Holdings2
UiPath
82.5%
Reddit
62.8%
Taboola
50.6%
GitLab
50.5%
Proterra
45.0%
Ant Financial
40.9%
Topgolf
38.7%
Harmony Bio
34.2%
Wish
32.3%
Rent the Runway
31.7%
Immunocore
28.7%
Riskified
28.5%
ACV Auctions
27.1%
Outset Medical
26.8%
Allbirds
25.9%
Compass
24.1%
SpaceX
22.7%
HashiCorp
22.5%
Nuvation Bio
21.9%
Malwarebytes
21.0%
Wheels Up
20.2%
Tempus Labs
19.1%
LegalZoom
17.8%
Warby Parker
17.7%
Grand Rounds
17.3%
Coupang
17.0%
Bird
16.9%
Tanium
14.1%
Starry
13.5%
Bolt Threads
11.4%
Sweetgreen
10.1%
MarkLogic
9.9%
Rubicon Global
8.3%
Smule
6.1%
Deliveroo
4.7%
Tory Burch
4.0%
Optoro
3.6%
Sharecare
3.6%
The Honest Company
2.7%
Lookout
2.4%
SoFi
1.4%
ClearMotion
0.4%
Didi Chuxing
0.1%
Snowflake
0.0%
AgBiome
0.0%
Confluent
0.0%
Cibus
0.0%
Stripe
0.0%
Magic Leap
0.0%
Prosetta Bio
0.0%
Sonder
0.0%
Grab
-0.0%
Delphix
0.0%
Endeavor
0.0%
Convoy
-0.4%
Blink Health
-3.7%
Databricks
-5.4%
Dataminr
-7.3%
Airbnb
-8.0%
Palantir
-9.0%
JUUL
-14.5%
Oscar Health
-22.0%
WeWork
-31.8%
23andMe
-36.0%
Zenefits
-36.7%
Lime
-87.5%

This report is based on data reported by 218 funds. Many holders of private company shares do not report their holding values and are thus not included in this report’s dataset. Further, many venture-backed private companies are not held by any reporting funds and are thus not included in this report. As such, this report should not be construed as providing a complete picture of shareholder sentiment or venture-backed private company performance.

1 Dollar-weighted return on all reported holdings
2 Equal-weighted mark-up or mark-down across all reported holdings

Notable Adjustments to Individual Positions

Largest % Mark-Up
UiPath
+82.5%
Reddit
+62.8%
Rent the Runway
+52.9%
Taboola
+50.6%
Largest % Mark-Down
Lime
-87.5%
Zenefits
-36.8%
23andMe
-36.0%
Dataminr
-32.9%
Trend Reversal - Positive3 (# = consecutive prior qtrs marked down or flat)
SoFi
12
Allbirds
6
Starry
4
Compass
3
Trend Reversal - Negative4 (# = consecutive prior qtrs marked up or flat)
23andMe
2
Databricks
2
Oscar Health
2
Tanium
2
ZX Firm Bids at Greatest Premium to Latest Reported Median Holding Value5
Airbnb
+48.6%
SpaceX
+18.5%
Didi Chuxing
-60.2%
-
-
ZX Firm Offers at Greatest Discount to Latest Reported Median Holding Value5
Reddit
-55.8%
SoFi
-42.2%
Rent the Runway
-30.4%
Bolt Threads
-29.1%

3 Trend Reversal – Positive reflects an individual holding marked up after consecutive quarterly periods marked down or flat
4 Trend Reversal – negative reflects an individual holding marked down after consecutive quarterly periods marked up or flat
5 Premium and Discount agnostic to share class

Commentary

Reported holdings appreciated 7.6% in this July 31st, 2020 reporting period, marking the second consecutive period of gains following several months of losses that coincided with the onset of the current recession. The 7.6% move higher was both larger in magnitude than June’s 3.5% gain and broader in scope, with more than 4 companies advancing for every decliner. The gains occurred despite large mark-downs from individual funds in JUUL ($100.53-$100.58/share) and Lime ($0.02/share).

UiPath ($18.57-$18.60/share) led gainers with the largest average mark-up, followed by Reddit ($49.73/share), Taboola ($34.03/share), and GitLab ($26.41/share). Lime, Zenefits ($1.91/share), 23andMe ($10.45/share) and WeWork ($7.03-$7.05/share) saw the period’s largest average mark-downs.

On an absolute dollar basis, Reddit contributed the largest appreciation to portfolios, followed by Ant Financial ($7.02-$10.46/share), SpaceX ($269.85-$270.02/share), and Taboola. JUUL, Lime, Palantir ($4.65-$5.75/share), and 23andMe ($10.45/share) contributed the largest dollar losses. Dataminr provided interestingly divergent data points, being both marked up and down by more than 30% by different holders.

23andMe, Databricks ($48.00/share), Oscar Health ($4.55/share) and Tanium ($10.31-$11.40/share) all saw negative reversals, marking the first time they have been marked down by individual funds in the last 6 months. SoFi ($15.57/share) saw a positive reversal for the first time in 3 years. Positive reversals were also seen in Allbirds ($10.17-$10.33/share), Starry ($1.43/share), and Compass ($123.41-$126.38/share).

ZX Market Updates Since Reporting Date

Demand for late stage private companies grew in September, with ZX bid volume outstripping ZX ask volume almost 2:1. ZX transactions priced from a 0% discount to a 26.5% premium to most recent financings, representing the first time in 2020 that no transactions occurred at a discount to the most recent primary financing levels. Both data points support the observation that we are operating in a sellers market.

On average, ZX Firm Buy Orders sit at a 2.3% premium to July 31st median holding values, brought down by bids in Didi Chuxing ($35.07-$52.44/share). Other notable bids include Airbnb ($65.43-75.85/share) and SpaceX ($269.85-$270.02/share), which are being bid at 48.6% & 18.5% premiums to their July median holding levels, respectively. ZX Firm Sell Orders are being offered at a 39.4% average discount to July 31st median holding values. Reddit, SoFi and Rent the Runway ($21.53-$24.44/Share) represent the largest discounts to median holding value at -55.8%, -42.2% and -30.4% respectively.

What is a ZX Firm Order?

ZX Firm Orders are unique to ZX. A ZX Firm Order (Offer or Bid) is a form of contract accepted on ZX, that allows a buyer or seller to contractually commit themselves to trading at the terms of an order ticket should a bona fide counterparty be presented, or pay a fee set to 10% of the notional value of the transaction should they fail to transact. Zanbato developed the concept of a Firm Order for private stock trading to solve for frequent frustration that parties often hold themselves out as buyers or sellers, but then pull out of transactions when counterparties are presented.

Disclaimer

Zanbato Securities LLC (“Zanbato”) prepares and disseminates market information about venture-backed private company securities, and the current bids and offers for those securities listed on the ATS operated by Zanbato (“ZX”). The information provided in this report has been prepared by sales, trading, or other non-research functions. Pricing indications and macro commentary are provided for factual information purposes only. This report is not intended to assess the individual merits of a particular investment or strategy, does not constitute a recommendation to buy or sell any financial instrument or to participate in any trading strategy and should not be construed as such. This report does not constitute investment advice. Certain information in this report has been obtained from third party sources and, while such information was believed by Zanbato to be reliable, it has not been independently verified by Zanbato and Zanbato shall not be responsible or liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with any use of, or reliance on, such third party information. Furthermore, the information contained in this report may not be current due to, among other things, changes in the financial markets or economic environment. Zanbato does not, and has no obligation to, update any such information contained in this report. Any prices or quotations contained herein are indicative only, do not represent firm quotes as to either price or size and should not be used for valuation purposes.

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