Secondary Data gave Clues to Primary Funding in July

ApeVue - New York, NY
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August 3, 2022

Private firms continue to have more stock sellers than buyers, says ApeVue about their secondary market composite inputs.

The presence of buyers and trades in July draws allusions to the daring stepping up to catch a falling knife. For those with the gumption to call the bottom here and be shrewd enough to confidently see the other side, we hope ApeVue data have helped.  For the bears who are betting on furthering declines ApeVue sheds light on, perhaps the tempered volatility of July is more of a seasonal lull.

Comparing the ApeVue50, an equally weighted total return benchmark of the 50 most active private stocks observed by ApeVue, to a publicly listed and tech-heavy Nasdaq, the private market woes have worsened in excess of 7% versus the public benchmark.

The ApeVue50 has declined 28.28% year to date through July 31st, compared to the Nasdaq (down 20.80%).

Company Spotlight: Klarna

Klarna has been widely discussed this month, as the Swedish “buy now, pay later” company has slashed its valuation by nearly 85% to below $7B during a $800mm primary fundraise. ApeVue composite pricing has tracked this drop, with Klarna’s share price down to $264.03, a significant difference from levels observed in late 2021 / early 2022 when the price reached highs of roughly $1700 and hovered around that level for a few months.

(Above) ApeVue pricing overlaid with Klarna’s two most recent funding rounds, June 2021 & July 2022. ApeVue tracked the steady drop of Klarna’s secondary pricing as it reached highs in late 2021/early 2022, and subsequent share prices declines to a level above its most recent funding round at $218 per share this past month.

This meteoric fall is a telling sign of how more venture backed private firms will likely be required to slash valuations from historic amounts in order to raise more capital in these uncertain economic times. 

This has been a trend across similar “buy now, pay later” firms, with public comparable Affirm ($AFRM) down ~73% YTD as of July 31st.

Cross Sector Review:

Layoffs - more to come or the worst is over?

Many tech and crypto firms have announced or completed large scale layoffs in order to cut back on costs and make their operations leaner as the economy seems to be in recession territory. Included in these are unicorns ApeVue provides daily pricing for, such as OpenSea, cutting 20% of its workforce, and Bolt, laying-off 33% of employees. Time will tell if these layoffs help firms to offset prior losses, with OpenSea and Bolt now at -6.49% and -51.75% YTD respectively.

Sector Spotlight: Data & Food

ApeVue50 Data sector has struggled in 2022, but July provided a much welcomed rise for investors in firms such as Cockroach Labs (+24.4%). Peers including as Airtable (-6.29%), Thoughtspot (-5.65%), and Arctic Wolf (+3.57%) helped slow losses from previous month-over-month declines in the sector, with the ApeVue Data index ending July up 2.10%; however YTD the Sector is -25.90%.

ApeVue50 Food has remained less volatile over the same period, since December 31st, 2020, now up 28% for the last 19 months following a strong July.

About ApeVue:

ApeVue provides objective, daily pricing for non-public company stocks. Our independent data help institutional investors understand market conditions, measure risk and assign valuations with confidence. Price data from ApeVue are constructed from aggregated, anonymized market activity information sourced from licensed brokers at the nexus of institutional trading. Unlike traditional company valuation assessments done quarterly, ApeVue data show equity price fluctuations between funding rounds and regular financial reporting periods. With the largest, most timely, independent dataset covering non-listed companies, ApeVue is the best source for up-to-date insights about the dynamic pre-IPO company market.