NEA and SVB Financial Group Get Stake in SecondMarket as Part of Transaction
Adds Capital Introduction to Private Company Program and Opens Silicon Valley Office
NEW YORK, NY, Oct. 7, 2009 – SecondMarket, the largest marketplace for illiquid assets, announced today that it has acquired Menlo Park-based InsideVenture, a facilitator of financing for late-stage private companies. With this announcement, SecondMarket will add a capital introduction service to its robust secondary market for private company stock. As part of the transaction, SecondMarket also announced the opening of its Silicon Valley office.
“This is an exciting acquisition for SecondMarket as we look to expand our position as the leading marketplace for private company stock,” said SecondMarket CEO Barry E. Silbert. “InsideVenture’s ability to match exciting, venture-backed companies with investment banks and top-tier investors adds an important capital introduction service to SecondMarket’s leading secondary program,” added Mona DeFrawi, founder and CEO of InsideVenture.
As part of the acquisition, New Enterprise Associates, Inc. (NEA) and SVB Financial Group will both take equity stakes in SecondMarket. The specific terms of the deal were not disclosed.
“We are thrilled to be involved with an innovative company like SecondMarket that is bringing much-needed liquidity to venture-backed companies and their investors,” said Chuck Newhall, General Partner and Co-Founder of NEA. “This acquisition allows private companies to benefit from SecondMarket’s secondary expertise along with InsideVenture’s success in connecting late-stage companies to capital from high-value investors.”
Launched earlier this year, the SecondMarket private company program, which allows companies to control the secondary market for their own shares, has garnered significant support from both entrepreneurs and the venture capital community. “We have monitored this market closely, and SecondMarket has clearly emerged as the industry expert,” said Mark Heesen, President of the National Venture Capital Association (NVCA). “We believe that SecondMarket has the right model to help fill the gap that exists in the capital formation process as a result of the systemic issues that have arisen in the public markets over the past decade.”
SecondMarket has facilitated over $1 billion in transactions in 2009, including tens of millions of dollars of transactions in leading private companies, and nearly 20 companies have already signed up for its private company program. Currently SecondMarket has over $200 million in private company stock available for sale.
“We have been extremely successful in working directly with companies and their shareholders to facilitate secondary liquidity,” said SecondMarket’s Silbert. “With our acquisition of InsideVenture, we are adding the primary raise piece that is so critical for fast growing companies. We look forward to working with investment banking advisors, the country’s top venture capitalists and asset managers to help private companies finance their growth and development.”
