Back in June, we spotted a few signs that pointed to a hot summer for the secondary venture market. Secondary data platforms like Forge Global and Caplight started to see activity ramp up, and buyers and sellers were finding better consensus on share pricing for the first time since the market corrected in early 2022. It seemed like the market might be returning to normal.

Well, not so fast. After the summer surge, activity in the secondary market has ebbed and flowed, but there are signs that 2024 may see investors returning for good.

Secondary trade volume reached a new peak this year in October, according to data from Caplight. The secondary data startup also found that the amount of capital passing through those transactions also peaked in that month. Javier Avalos, the founder and CEO of Caplight, told TechCrunch+ that the data isn’t actually as positive as it seems at first glance.

“Investor appetite is cautiously optimistic [but] nowhere near early 2021 and 2022 levels,” Avalos said. “In the summer months of this year, there was a pretty heavy expectation that investor appetite was going to come back into VC secondaries, but the numbers look a lot worse if you strip out generative AI.”

Avalos added that while secondary trading activity has risen again as we head into the last month of the year, that momentum has so far been concentrated in just a few sectors, including AI, defense and space. Within that, much of the activity surrounds only a handful of companies, including SpaceX and OpenAI, which have seen strong interest throughout the funding compression, and companies like Databricks, which are prime IPO candidates for 2024.

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