Table of Contents

Executive Summary

Reported Holdings as of May 31st, 2020:

  • Reporting holders marked down their private portfolios 10.6% in May, though a 2:3 advance-decline ratio suggests that mark-downs were more concentrated than in the months preceding (March and April saw 1:3 advance-decline ratios)
  • Sentiment up:
  • Sentiment down:

ZX Market Update since May 31st, 2020:

  • July volumes strong, bolstered by a resurgence of “pre-IPO” trading
  • July transacted prices ranged from a 51% discount to a 25% premium to recent financings
  • Sectors such as eCommerce, Data & Analytics, and Enterprise SaaS have led the market higher

Heat Map: May 31, 2020 Reporting Period

-10.6%

Appreciation/Depreciation of All Reported Holdings1

-6.1%

Average Mark-Up/Mark-Down Across All Reported Holdings2
Generation Bio
42.1%
Coupang
32.9%
Sonder
27.9%
ServiceTitan
27.1%
Harmony Bio
23.5%
AlloVir
22.7%
Butterfly Network
22.0%
Nuvation Bio
21.9%
Tanium
21.8%
Immunocore
19.3%
Seer
15.4%
Outset Medical
14.7%
Riskified
14.0%
Clover Health
14.0%
Oscar Health
13.6%
23andMe
13.0%
RefleXion Medical
12.7%
Blink Health
12.1%
Klarna
11.6%
Ant Financial
10.7%
Bolt Threads
10.3%
Convoy
10.1%
Warby Parker
7.3%
Lookout
5.5%
Taboola
5.3%
Reddit
3.1%
The Honest Company
1.0%
Rivian
0.0%
Ginkgo Bioworks
0.0%
Doximity
0.0%
Aurora Innovation
0.0%
Stripe
0.0%
Akouos
0.0%
SpaceX
0.0%
DoorDash
0.0%
Vroom
0.0%
Element Bio
-2.1%
ACV Auctions
-3.1%
Castle Creek
-3.1%
Faraday Pharma
-4.2%
Codiak Bio
-4.7%
Yumanity
-4.8%
JUUL
-7.7%
Druva
-10.0%
Wheels Up
-12.1%
Bird
-12.1%
UiPath
-12.5%
Starry
-14.7%
Sweetgreen
-15.2%
1stdibs
-16.9%
Topgolf
-18.7%
Altiostar
-20.0%
LegalZoom
-20.0%
Deliveroo
-20.1%
Heal
-20.2%
Toast
-20.8%
Allbirds
-22.3%
Didi Chuxing
-22.5%
Rent the Runway
-23.5%
D2iQ
-26.0%
Tempus Labs
-26.0%
Checkr
-26.0%
Seismic
-26.0%
HaulHub
-26.0%
Plex Systems
-26.0%
Kardium
-26.0%
AgBiome
-29.0%
MOD Pizza
-36.5%
Airbnb
-37.3%
WeWork
-41.1%
Moda Operandi
-41.6%
Dataminr
-41.6%
Goop
-51.7%
Intarcia Therapeutics
-86.5%
Magic Leap
-88.1%

This report is based on data reported by 212 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
Generation Bio
+73.2%
Coupang
+32.9%
Sonder
+27.9%
ServiceTitan
+27.4%
Largest % Mark-Down
Magic Leap
-90.2%
Intarcia Therapeutics
-87.9%
WeWork
-52.9%
Goop
-51.7%
Trend Reversal - Positive3 (# = consecutive prior qtrs marked down or flat)
Generation Bio
6
Sonder
3
The Honest Company
2
Butterfly Network
2
Trend Reversal - Negative4 (# = consecutive prior qtrs marked up or flat)
Starry
12
Plex Systems
9
Altiostar
8
Checkr, Tempus Labs, Airbnb
7
ZX Firm Bids at Greatest Premium to Latest Reported Median Holding Value5
Palantir
+3.7%
Klarna
-23.8%
Didi Chuxing
-61.8%
-
-
ZX Firm Offers at Greatest Discount to Latest Reported Median Holding Value5
Bolt Threads
-24.2%
Reddit
-34.7%
-
-
-
-

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

Reporting holders marked down their private portfolios 10.6% in this May 31st, 2020 reporting period despite the broader public markets advancing aggressively off their March lows. While the depreciation of reported holdings was greater than April’s 7.6% decline, mark-downs were concentrated in a smaller portion of companies as the advance-decline ratio narrowed to 2:3 from 1:3 in April.

Generation Bio ($5.34-$9.68/Share) led gainers with both the largest average appreciation across portfolios and the largest percentage mark-up by an individual fund, likely in anticipation of its subsequent June IPO. After Generation Bio, Coupang ($7.84/Share), Sonder ($10.76-$10.77/share), and ServiceTitan ($33.75-$33.80/Share) contributed the largest dollar gains to portfolios, while mark-downs in Magic Leap ($2.39-$5.40/Share), Intarcia Therapeutics ($4.89-$18.52/share), Goop ($7.83/share), and Dataminr ($11.00/share) contributed the largest dollar losses.

On average, positions were marked down 6.1% this period. The same companies that contributed the greatest appreciation and depreciation to tracked portfolios also saw the largest mark-ups and mark-downs by individual funds, with the exception of WeWork ($5.09-$7.81/Share), which saw the period's third largest mark-down at 52.9% but is a relatively smaller position which didn’t materially impact overall portfolio value.

Negative reversals in Starry ($1.22/share), Plex Systems ($2.15/Share) and Altiostar ($3.85/Share) were the first times the companies have been marked down by individual funds in three and two years respectively, while positive reversals in Generation Bio, Sonder and The Honest Company ($14.38-$45.76/share) reflected recent tailwinds for Biotechnology, Travel & Tourism and Consumer Goods & Services companies as investors may have been optimistic seeing the first signs of the economy reopening.

ZX Market Updates Since Reporting Date

Secondary trading volumes continued to grow through the summer, driven by strong institutional demand for mid- and late-stage private companies. July volumes were further bolstered by a resurgence of “Pre-IPO” trading, with new capital coming into the market looking to gain exposure to companies like Asana, Marqeta, Palantir and Procore that are believed to be nearing listing events. Increased attention also drove an uptick in demand for highly valued companies like Bytedance and SpaceX.

July saw transacted prices range from a 51% discount to a 25% premium to most recent financings, again supporting the observation that investors are being discerning as they evaluate private companies individually. Sectors such as eCommerce, Data & Analytics and Enterprise SaaS have led the market higher.

On average ZX Firm Sell Orders are being offered at a 29.5% discount to May 31st median holding value, an additional 10% discount to April’s 20.2%. Firm offerings in Reddit ($33.69/share) and Bolt Threads ($15.84/share) again marked the largest discounts to median holding value at 34.7% and 24.2% respectively. Palantir has the only ZX Firm Bid at a premium to May’s median holding value, while Klarna and Didi Chuxing have firm buyers bidding below median holding value.

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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