By the end of 2024, it’s clear that the world—and the investment landscape—has fundamentally shifted. As an industry, we’ve embraced new paradigms while letting go of outdated assumptions.
If we had to sum it up in three words: AI, private, and scaling.
*AI: *The sheer belief in AI—both in talent and capital—is undeniable. No investor can afford to ignore it; the only choice is deciding your AI strategy.
Private is the new public: In 2024, companies overwhelmingly chose to remain private, leveraging a market environment that allows them to stay private for as long as they need.
Scaling redefined: The rules of scaling have changed across all sectors. New scaling dynamics are emerging, and with them, the need to develop fresh metrics to measure success effectively.
These themes defined 2024 and will continue to shape the years ahead.

Fundraising in 2024: A Tale of Two Realities

In 2024, fundraising painted a divided picture: investors lamented a lack of compelling investment opportunities, while startups grappled with the challenges of raising capital. However, the reality was more nuanced, with outcomes varying significantly across different cohorts.

Billion-Revenue Club

These are private companies with $1B+ in annual revenue, dominating secondary markets and raising significant primary rounds. Their tender offers satisfied early stakeholders while oversubscribed funding rounds brought in fresh capital. This cohort accounted for a substantial portion of secondary market activity, reflecting their unparalleled appeal to investors.

Capital-Intensive AI Infrastructure and Defense-Tech Companies

Once overlooked by traditional VC investors, these companies found a lifeline in 2024 through Big Tech funding, which catalyzed venture investors to follow. AI infrastructure and defense-tech have emerged as critical sectors, reshaping investment priorities. (We’ve covered this trend in a detailed article).

AI Software Startups

AI agents, or “Service as Software,” represent a transformative third cohort. Unlike SaaS, these startups rely on AI-specific metrics for monetization, scaling, and ROI. Key metrics include the percentage of valid AI responses, measurable revenue contributions, and cost/time savings. This cohort underscores the importance of adopting AI-focused product benchmarks in a rapidly evolving market.

Non-AI Private Companies

For startups outside the AI boom, 2024’s tight fundraising market posed significant challenges. In the era of higher interest rates, securing venture funding required strong fundamentals:

• A profitable product or service with a sizable customer base.
• An AI strategy to remain competitive.
• Rethinking pricing strategies, focusing on value-based models like per-seat, consumption-based, or tying pricing to displaced human labor costs.
• Integrating AI-related product metrics to demonstrate value and impact.

Private Markets in 2024: A Shift Towards the "Best"

With Databricks’ record-breaking round, it seems there are few limits for private market investors seeking exposure to the "best" private companies. The demand for top-tier assets has driven unprecedented activity, particularly among venture-backed tech firms using fundraising to cash out employees, investors, or cover taxes on employee cashouts.
Since last March, seven prominent companies—Stripe, Databricks, CoreWeave, Figma, Canva, Revolut, and Rippling—have collectively raised $18.8 billion for these purposes. This figure excludes giants like SpaceX and ByteDance, whose secondary fundraising totals remain unclear but are undoubtedly significant.

A Secondary Market for the Elite

This trend has redefined the secondary market, transforming it into a platform predominantly for the "best" private companies. In 2024:
These seven companies alone accounted for 17% of the listed volume on secondary platforms.
The broader "Billion-Revenue Club" of 25 private companies contributed a staggering 63% of the year's total listed volume.
Companies with secondary valuations starting at $10 billion made up 62% of listed volume, emphasizing the dominance of high-value assets.

From Stigma to Strategy

Historically, Silicon Valley viewed large secondary sales before IPOs with skepticism, interpreting them as a lack of confidence in a company’s future growth. However, with the IPO market nearly dormant for three years and M&A activity constrained, secondaries have shed their stigma.
Today, private stock sales are increasingly seen as the new exit strategy. Secondary markets are on track to achieve record levels in 2024, driven by the demand for liquidity among employees, early investors, and even founders. This evolution underscores the growing importance of secondaries in a market environment that prioritizes flexibility and access to top-tier opportunities.

Activity and Concentration

The secondary market saw a notable increase in the number of active companies, with 304 companies participating in secondary transactions throughout the year. However, the share of top-tier companies in terms of transaction volume has risen significantly, pointing to a growing concentration of activity around the market leaders.
In particular, companies from the Launchbay-25 Index—a benchmark of the fastest-growing and most sought-after private tech firms—played a dominant role. Their share of the transaction volume on the Launchbay platform increased steadily over the year, underscoring the heightened demand for exposure to the “best” private companies.
This shift reflects a broader trend: while the secondary market is becoming more accessible and active, investor interest remains heavily skewed toward the top-performing firms. These companies often offer stronger fundamentals, higher growth potential, and greater liquidity, making them attractive in an environment where quality is paramount.
As the secondary market matures, this dual dynamic of expanded participation and concentrated volume will likely continue to shape its evolution in 2025. Investors will increasingly focus on the elite cohort of private companies, driving both demand and valuations in this segment.

A Shift Toward Premium Valuations

Pricing in the secondary market showed significant improvement over the course of 2024, reflecting increased investor confidence and stronger demand for top-tier private companies.

Early 2024: At the start of the year, the median premium for listed companies was -36%, indicating a widespread discount on secondary shares. 46.2% of the listed volume represented companies trading at a premium. Among the top 10 companies by listed volume, however, the median premium stood at 12%, highlighting their relative resilience.

End of 2024: By December, the median premium had risen to -24%, and the share of listed volume for companies trading at a premium increased to 61.5%. For the top 10 companies, the median premium had more than doubled to 24%, underscoring the growing demand for high-quality private assets.
This trend illustrates a clear bifurcation in the market: while pricing improved broadly, the top-performing companies—particularly those in the Launchbay-25 Index—commanded increasingly higher premiums.

Implied Valuations: Growth and Volatility in 2024

The secondary market in 2024 was marked by significant volatility, reflecting the dynamic and evolving nature of private company valuations.
Volatility Dominates: Only 26% of active companies experienced a year-over-year (YoY) valuation change within the relatively stable range of -10% to +10%. This highlights the wide swings in investor sentiment and company performance across the private market.
Growth Prevails: Despite the volatility, 58% of active companies saw their valuations grow YoY, underscoring the resilience and attractiveness of many private firms.