SharesPost Private Growth Index Reports First Quarter Increase of 9.3 Percent
July 3, 2019 | Blog

SharesPost Private Growth Index Reports First Quarter Increase of 9.3 Percent

In the first quarter of 2019, the SharesPost Private Growth Index — which tracks valuations for 106 private growth firms — increased by 9.3 percent to 183.8 from 168.2 at the end of 2018. By comparison, both the S&P 500 and the Dow Jones U.S. Technology Index were up 13.1 percent and 19.3 percent respectively during the same period. Private asset growth was marginally outperformed by public indices in Q1/2019.

Since its launch on January 1, 2017, the SharesPost Index has increased 83.78 percent through March 31, 2019. By comparison, the S&P 500 increased 26.6 percent whereas the Dow Jones U.S. Technology Index increased 58.48 percent during the same period.

Early indications from Q2 2019 data through May suggest the index has continued to perform well in 2019: from the beginning of the year through May 31, the SharesPost Index has increased 12.5 percent. By comparison, both S&P 500 and Dow Jones U.S. Technology Index have increased by 9.6 percent and 14.6 percent respectively.

On a cumulative basis from January 1, 2015 to May 31, 2019, the SharesPost Index increased approximately 244 percent; the S&P 500 rose 33.7 percent and the Dow Jones Index increased 76.3 percent.

Q/2019 SharesPost Private Growth Index Performance Drivers

Key events affecting the Index’s performance during the first quarter of 2019 include:

(+) Upside drivers: Primary funding rounds during this period included Casper (Series D), Databricks (Series E), DoorDash (Series F), Medallia (Series F), Opendoor (Series E-2), Postmates (Series F), SpaceX (Series J), Reddit (Series D), Desktop Metal (Series E), Rubrik (Series E), and Acorns (Series E-1).

On average, the valuation of the eleven companies that completed a primary funding round during Q1/2019 increased by 82 percent.

There was one Initial Public Offering (IPO) during Q1/2019 of companies tracked in our 2019 Index —Lyft, the first unicorn IPO of the year.

There were two M&As during Q1/2019 of companies tracked in our 2019 Index: Auris Health and Cylance.

(-) Downside drivers: We did not track any notable down round fundings during Q1/2019.

Amongst the index companies, there have been a total of three exits through March 31, 2019, either via an IPO or M&A, averaging approximately one per month.

2019 Index Rebalance Results

The index was rebalanced for 2019 with the removal of eleven exited companies and the addition of eleven new ones. The cumulative implied valuation of the 106 private growth companies in the Index stood at 385.5 billion during the 1st quarter of 2019, and the median implied valuation of the same segment was 1.2 billion.

Companies added to the Index in 2019:

Index Additions
Acorns Collective Health Scopely
American Well Freshworks Tradeshift
Butterfly Network Indigo Starry
C2FO InVision

Companies removed from the Index in 2018:

Name Exit Type Date Exited
Zscaler IPO 3/16/2018
Zuora IPO 4/12/2018
Avalara IPO 6/15/2018
Guardant Health IPO 10/4/2018
Anaplan IPO 10/12/2018
AppNexus M&A 8/15/2018
Bloom Energy IPO 7/25/2018
DocuSign IPO 4/27/2018
Domo IPO 6/29/2018
GitHub M&A 10/25/2018
Dropbox IPO 3/23/2018
PLEASE READ THESE IMPORTANT LEGAL NOTICES & DISCLOSURES

CONFLICTS

This report is being published by SharesPost Research LLC, and distributed by SharesPost Financial Corporation, a member of FINRA/SIPC. SharesPost Research LLC, SharesPost Financial Corporation and SP Investments Management, LLC, an investment adviser registered with the Securities and Exchange Commission, are wholly owned subsidiaries of SharesPost, Inc.

Recipients who are not market professionals or clients of SharesPost Financial Corporation should seek the advice of their own personal financial advisors before making any investment decisions based on this report. None of the information contained in this report represents an offer to buy or sell, or a solicitation of an offer to buy or sell, any security, and no buy or sell recommendation should be implied, nor shall there be any sale of these securities in any state or governmental jurisdiction in which said offer, solicitation, or sale would be unlawful under the securities laws of any such jurisdiction.

This report does not constitute an offer to provide investment advice or service. Registered representatives of SharesPost Financial Corporation do not (1) advise any member on the merits or advisability of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services.

ANALYST CERTIFICATION

The analyst(s) certifies that the views expressed in this report accurately reflect the personal views of such analyst(s) about any and all of the subject securities or issuers, and that no part of such analyst compensation was, is, or will be, directly or indirectly related to the specific views contained in this report.

Analyst compensation is based upon various factors, including the overall performance of SharesPost, Inc. and its subsidiaries, and the performance and productivity of such analyst, including feedback from clients of SharesPost Financial Corporation and other stakeholders in our ecosystem, the quality of such analyst’s research and the analyst’s contribution to the growth and development of our overall research effort. Analyst compensation is derived from all revenue sources of SharesPost, Inc., including brokerage sales.

DISCLAIMER

This report does not contain a complete analysis of every material fact regarding any issuer, industry, or security. The opinions expressed in this report reflect our judgment at this date and are subject to change. The information contained in this report has been obtained from sources we consider to be reliable; however, we cannot guarantee the accuracy of all such information.

Any securities offered are offered by SharesPost Financial Corporation, member FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost, Inc. Certain affiliates of these entities may act as principals in such transactions.

Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative and involves a high degree of risk. It should only be considered as a long-term investment. You must be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks and you should complete your own independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or other investment advice.

Accordingly, investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.

SharesPost, the SharesPost logo, My SharesPost, the SharesPost Index, and SharesPost Investment Management are all registered trademarks of SharesPost, Inc. All other trademarks are the property of their respective owners.

Copyright SharesPost, Inc. 2019. All rights reserved.

Alejandro Ortiz

Alejandro Ortiz

Alejandro is a Research Analyst, Private Investment Research for SharesPost Research LLC. Prior to joining SharesPost, he was a Valuation Analyst at Duff & Phelps with a focus on TMT industries.
PLEASE READ THESE IMPORTANT LEGAL NOTICES & DISCLOSURES

CONFLICTS

This report is being published by SharesPost Research LLC, and distributed by SharesPost Financial Corporation, a member of FINRA/SIPC. SharesPost Research LLC, SharesPost Financial Corporation and SP Investments Management, LLC, an investment adviser registered with the Securities and Exchange Commission, are wholly owned subsidiaries of SharesPost, Inc.

Recipients who are not market professionals or clients of SharesPost Financial Corporation should seek the advice of their own personal financial advisors before making any investment decisions based on this report. None of the information contained in this report represents an offer to buy or sell, or a solicitation of an offer to buy or sell, any security, and no buy or sell recommendation should be implied, nor shall there be any sale of these securities in any state or governmental jurisdiction in which said offer, solicitation, or sale would be unlawful under the securities laws of any such jurisdiction.

This report does not constitute an offer to provide investment advice or service. Registered representatives of SharesPost Financial Corporation do not (1) advise any member on the merits or advisability of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services.

ANALYST CERTIFICATION

The analyst(s) certifies that the views expressed in this report accurately reflect the personal views of such analyst(s) about any and all of the subject securities or issuers, and that no part of such analyst compensation was, is, or will be, directly or indirectly related to the specific views contained in this report.

Analyst compensation is based upon various factors, including the overall performance of SharesPost, Inc. and its subsidiaries, and the performance and productivity of such analyst, including feedback from clients of SharesPost Financial Corporation and other stakeholders in our ecosystem, the quality of such analyst’s research and the analyst’s contribution to the growth and development of our overall research effort. Analyst compensation is derived from all revenue sources of SharesPost, Inc., including brokerage sales.

DISCLAIMER

This report does not contain a complete analysis of every material fact regarding any issuer, industry, or security. The opinions expressed in this report reflect our judgment at this date and are subject to change. The information contained in this report has been obtained from sources we consider to be reliable; however, we cannot guarantee the accuracy of all such information.

Any securities offered are offered by SharesPost Financial Corporation, member FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost, Inc. Certain affiliates of these entities may act as principals in such transactions.

Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative and involves a high degree of risk. It should only be considered as a long-term investment. You must be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks and you should complete your own independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or other investment advice.

Accordingly, investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.

SharesPost, the SharesPost logo, My SharesPost, the SharesPost Index, and SharesPost Investment Management are all registered trademarks of SharesPost, Inc. All other trademarks are the property of their respective owners.

Copyright SharesPost, Inc. 2019. All rights reserved.