Liquidity is back — just not through IPOs (yet)

After two years of a constrained exit environment, private-market liquidity is increasingly being delivered through secondaries and structured transactions, not traditional IPOs. Caplight’s 2025 VC Secondary Market Update calls 2025 the strongest year for venture secondaries since 2021, with closed transaction volume on the platform rising to $3.5B in 2025 vs. $2.0B in 2024 and $1.3B in 2023, underscoring how quickly secondaries have moved from “optional tool” to core market infrastructure.

A key insight, however, is that this liquidity is highly concentrated at the top of the market. Caplight notes that in Q4 2025, 90% of total trading volume was concentrated in just 15 companies, driven by demand for category leaders, IPO candidates, and recently funded names. In other words: price discovery and liquidity are returning, but mainly for the companies investors still want to own.

The broader secondaries ecosystem is also setting records. Evercore’s Private Capital Advisory team reported that private asset secondaries reached a record ~$226B in 2025, up ~41% year-over-year, reinforcing that LPs and GPs are increasingly relying on secondaries as a strategic liquidity path in a slower distribution environment. This matters because it marks a structural shift: secondaries are no longer just a pressure-release valve — they’re becoming a permanent layer of private-market plumbing.

At the same time, there are early signals of an IPO market reopening in select lanes. Several high-profile companies — including Discord and Strava — have reportedly filed confidentially for IPOs, a pattern consistent with “test-the-waters” preparation rather than an immediate sprint to pricing. 

Discord is a particularly telling example of how the private-to-public journey has evolved. In 2021, the company raised $500M at a ~$15B valuation, shortly after reportedly rejecting a $12B takeover approach from Microsoft. More recently, Discord’s implied pricing in secondary markets has been materially lower, with Bloomberg reporting it trading around $6–7B. If Discord comes public anywhere near those levels, it would still debut as a large public company, potentially landing in the upper quartile of the Russell 2000 from day one, and underscoring how many category-defining platforms now spend years building scale and liquidity pathways inside private markets before ever ringing the bell.

Strava tells a different but equally important story: time. Founded in 2009 and backed through multiple market cycles, Strava raised a round last year at a valuation of ~$2.2B including debt, more than a decade after its early institutional financing. Even with clear product-market fit and strong cultural relevance, the company’s path illustrates how “IPO-ready” is increasingly a process, not a moment, and how many high-quality businesses remain private far longer than traditional venture timelines once assumed.

Together, Discord and Strava highlight a widening window between crossing $2B+ valuations and ultimately reaching public markets. That’s precisely where dedicated secondaries and late-stage private investors can play an important role: helping provide liquidity, supporting ownership transitions, and gaining exposure to companies that are still scaling toward public-market maturity, but are no longer early-stage venture outcomes. In today’s environment, where secondaries are taking on a bigger share of the liquidity burden and IPOs reopen selectively, this “in-between” phase is becoming one of the most investable parts of the private market lifecycle.

Combined with other emerging candidates, these moves suggest public-market access is returning, but in a more selective, higher-bar environment, where scale, profitability (or a credible path), and durable category leadership matter more than ever.

Bottom line: the market is re-risking, but cautiously — and secondaries are doing much of the heavy lifting. For investors, this is creating a compelling opportunity set: access to high-quality private companies with more frequent liquidity windows, improving price transparency, and multiple potential paths to realization across secondaries, M&A and IPOs.

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THEMATIC RESEARCH DISCLOSURE: This article is for informational purposes only and represents the thematic analysis of Prepublic Equity Partners ("PEP"). This content is intended to discuss industry trends and does not constitute investment advice, a recommendation, or a solicitation to buy or sell any securities. PEP is not a registered investment adviser or broker-dealer.

Private company data and "pre-IPO" mentions are based on available market reports and have not been independently verified. Investing in late-stage venture capital involves high risk and illiquidity. PEP or its affiliates may hold financial interests in the companies or sectors discussed, and we reserve the right to trade these positions at any time without notice.