If you’ve read a story about SecondMarket on VatorNews in the past few months, chances are it had much more to do with Facebook’s skyrocketing valuations on the secondary market than anything else. Don’t be surprised, though: SecondMarket is much more than a place to trade shares in private companies.While the company reported this week that it completed over $400 million in transactions for those pre-IPO companies, those trades account for less than 10 percent of all transactions on the site, which totals to about $5 billion.
SecondMarket is a secondary market for trading all sorts of alternative and illiquid investments: bankruptcy claims, mortgage backed securities, whole loans and more.
That said, the fastest growing segment of SecondMarket is the trading of private company stock, which in the fourth quarter of 2010 reached $150 million, doubling volume from the quarter before. Besides Facebook, the most popularly traded private companies would have to be Twitter and Zynga, the other favorites in the Silicon Valley world right now.
Coming out of a strong financial year, the company is already looking to the future with a new online platform currently in development. Though he’s being “intentionally short on details” at the moment, SecondMarket founder and CEO Barry Silbert says the new platform makes a lot of significant aesthetic changes to increase usability and efficiency. As far as the environment goes, it doesn’t seem like much is changing, but the interface enclosing that environment will be rehauled.
In a nutshell, Silbert’s company is trying to create “the standard for the next generation of alternative investments.”
No precise release date for the revamped platform has been given, but Silbert says they are just putting finishing touches.
Just about a year ago, SecondMarket completed a $15 million round of funding from Hong Kong billionaire Li Ka-shing to make more hires, pursue M&A deals and expand the platform. Looks like they spent their money well. Watch Bambi Francisco’s exclusive interview with Silbert here.
