“Shares prices for private tech companies continued to be strong in the fourth quarter of 2017 and for all of 2017,” said Managing Director Rohit Kulkarni, Head of Research for SharesPost, Inc. “2017 performance was clearly above 2016 performance, implying an upward trend in private tech valuations. IPO activity this year hints at strong start to 2018.”
The Index rose from 112.63 as of September 30, 2017 to 118.48 as of December 31 2017– a 5.2% increase in the valuation of the 87 private growth companies in the Index. The Q4 2017 gain compares to a 6.1% increase in the S&P 500 and an 8.5% increase in the Dow Jones U.S. Technology Index.
On a year-to-date basis through December 31, 2017, the 18.5% increase in private company valuations nearly equaled the 19.4% increase in the S&P 500. The Index trailed the 35.4% increase in the Dow Jones U.S. Technology Index. Preliminary Q1 2018 data indicate that the Index has lagged the performance of public market equities, which benefitted from the continuing bull market.
On a cumulative basis, the Index is up 102.9% from January 1, 2015 through December 31, 2017, compared to an increase of 29.9% for the S&P 500 and an increase of 56.3% for the Dow Jones U.S. Technology Index.
The Q1 Index is due out in early July.
About the SharesPost U.S. Private Growth Index
Each quarter, the Index states the percentage gain or loss in valuation for the companies included in the Index. The Index is currently composed of U.S.-based private growth companies in multiple tech sectors, including Consumer Internet, Enterprise Software, Energy, Healthcare and Financial Services. There are 106 companies in the Index as of Jan 1, 2018, compared to 87 companies as of Jan 1, 2017. The cumulative market capitalization of the companies in the index has increased from $292 billion at the beginning of 2017 to $317 billion starting 2018. Median market cap of the companies in the Index is $1.1 billion.
The Index’s numerical value is based on a formula developed by SharesPost Research LLC, a wholly owned subsidiary of SharesPost, Inc. The Index relies on data from SharesPost Financial Corporation’s secondary transactions, the Index companies’ primary funding rounds and publicly available valuation marks, including the holdings of 75 publicly reporting mutual funds. For complete disclosures and more details about the Index methodology, including the companies that comprise the Index, click here.
About SharesPost, Inc.
Based in Silicon Valley, SharesPost is an SEC-registered broker-dealer, investment advisor and an approved Alternative Trading System. SharesPost helped launch the private tech growth market in 2009 and has built one of the leading platforms for secondary transactions and Initial Coin Offerings pursuant to Reg. D. With nearly $3 billion in secondary market transactions for more than 180 leading technology companies, SharesPost provides shareholders and buyers with the trading, research and online tools to transact in the private market with confidence. For information, visit sharespost.com.
Cautionary Note Regarding Forward-Looking Statements
The matters described herein contain forward-looking statements. These statements include, but are not limited to, statements about research on late-stage, venture-backed companies. We caution that these statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements involve a number of risks, uncertainties or other factors beyond SharesPost’s control. These factors include, but are not limited to, factors detailed in the white paper. We undertake no obligation to release any revisions to any forward-looking statements.