Nasdaq is spinning off its marketplace for private shares into a separate business as more investors clamor for a piece of pre-IPO companies
Nasdaqwill work with a group of banks to spin off its Nasdaq Private Market unit into a separate business.
- Private companies have used Nasdaq's business to raise capital and manage secondary transactions.
- SVB Financial and Goldman Sachs are part of the consortium to establish a secondary trading venue for private company stock.
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Stock exchange operator Nasdaq said Tuesday it has entered into a joint venture through which it will spin off its marketplace for shares of private companies,
Nasdaq Private Market, a platform on which private companies raise capital and manage secondary transactions, will become a standalone company in partnership with Citigroup, Goldman Sachs, and Morgan Stanley and SVB Financial Group, the parent company of Silicon Valley Bank. The spin-off will receive strategic investments from the group of banks. Financial terms of the agreement were not disclosed in Tuesday's joint statement. Nasdaq launched the private market in 2014.
Nasdaq said the joint venture will accelerate business in the private company secondary trading market, a market sought after by investors looking to buy into startups and by people working for those companies who want to cash out their shares.
"Innovation companies are staying private longer and need the ability to offer their employees a safe and easy way to generate liquidity while they are building their businesses," Greg Becker, CEO of SVB Financial, in the statement. The venture "will offer our clients a path to employee retention in an environment where access to talent is one of the biggest challenges," he said.
Nasdaq said its platform has been the leading provider for private company tender offer liquidity over the last five years, with its team facilitating 477 transactions and executing more than $30 billion in transaction volume. Cryptocurrency exchange operator Coinbase used Nasdaq Private Market ahead of launching its IPO in April.
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