As Erick wrote last week, SecondMarket, the marketplace for alternative investments, has been seeing quite a bit of activity of late. In fact, SecondMarket’s private stock transactions in the first three quarters of 2011 totaled $435 million, a 73 percent increase over the same period last year. SecondMarket lays out all these stats and more in its third quarter report, including the breakdown over who exactly is purchasing these shares. Interestingly, VCs made up less than 1 percent of transactions (and only 0.2 percent by dollar amount) last quarter.
But, today, SecondMarket is announcing that it has received some serious outside investment of its own. The marketplace today closes a $15 million series C round, led by The Social+Capital Partnership, the new venture fund established by former Facebook VP Chamath Palihapitiya. The former Facebook and Aol VP will also be joining SecondMarket’s board of directors.
The Social+Capital Partnership, which is focused on backing healthcare, education, financial services, and mobile companies, recently invested $17 million in enterprise social network, Yammer.
“SecondMarket has become the preeminent platform for private company shares enabling companies to meet their liquidity needs, help retain and reward talent, and provide start-ups with an opportunity to monetize and grow their businesses”, Palihapitiya said in a statement.
For companies that are not yet ready to go public, SecondMarket has become one of the top alternatives, and has itself raised over $19 million to date from big-name investors like Li Ka-shing and Temasek. The series C investment not only brings the company’s total to $34 million, but raises its valuation to $200 million, according to the Wall Street Journal.
The company will use the funding to ramp up hiring, expand beyond technology companies into new asset classes, and look for potential acquisitions. SecondMarket is also facing competition from Wall Street, as two firms, Cantor Fitzgerald & Co. and Liquidnet, have in the last few months both expanded their portfolios to include pre-IPO trading of shares.
SecondMarket is a reinvented stock market. We provide products and services that enable companies, community banks, student loan issuers and funds to manage liquidity, raise capital and communicate with key stakeholders. A Better Market… We’re empowering entrepreneurs by reinventing the modern stock market and redefining the modern company. We’re enabling companies to manage liquidity, communicate with key stakeholders and raise capital through products that give control to companies, not to Wall Street. We’re changing the market,...
The Social+Capital Partnership (“Social Capital”) is a partnership of philanthropists, technologists and capitalists utilizing venture capital as a force to create value and change on a global scale. The Partnership is based in Palo Alto, California.