MarketX launching US$150M fund to invest in pre-IPO tech companies
MarketX, a one-stop platform for pre-IPO investments with operations in China, the US and Singapore, is launching a US$150 million fund to invest in pre-IPO technology companies, its Founder and CEO Cathryn Chen told e27.
Christened MX50, the fund is already in advanced talks with 30-odd Family Offices in Asia, and expects to make the final close by September-October this year.
She didn’t however share the names of the investors.
MX50 is a global diversified late-stage technology fund, which invests in market leading private companies in the US and Asia. According to Chen, this strategy offers significant upside potential and limited risks compared to traditional venture capital. “There are not a lot of late-stage pre-IPO secondary funds in the market. We believe we can leverage our platform business, which has been around for five years, to help investors take advantage of the in-transparent secondary pre-IPO market.”
She says the fund is fundamentally different from traditional VC funds. “We are not investing in early-stage companies, which comes with a lot of risk. Usually when you invest in 1,000 early-stage companies, only one will become a unicorn and most of the time you will lose all your money. On the other hand, MX50 invests in companies that have proven track record and are expected to rise in value at least 2-5X before IPO,” she explained.
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The fund aims to invest in five to eight companies in total. The transaction size will vary between US$1 million and US$100 million.
More on MarketX’s platform business
MarketX is a pre-IPO investment platform catered to Family Offices around the world. Basically, it helps clients invest in top pre-IPO companies such as Uber, Airbnb, Tencent Music, Bytedance, and Grab. Chen says MarketX is already working with 8,500-plus family offices, funds, and high net-worth individuals, and has over 30 asset partners, with combined assets of over US$5 billion across the globe. In China alone, MarketX works with more than 300 entrepreneurs via its institutional partnerships.
“We aim to help Family Offices get access to opportunities previously not available to them directly. It’s a new asset class we are creating. We focus on secondaries in private stocks, which not a lot of VCs actively invest in,” Chen added.
So far, the MarketX platform has raised US$1.6 million in seed funding from prominent entrepreneurs and investors, such as Boquan He, Lie Jun Cai WenSheng and other top angels in China.
MarketX, with operations in different parts of the world including the US and China, recently soft-launched in Singapore. It has also received the Monetary Authority of Singapore’s licence to operate in the city-state.
Explaining the rationale behind the Singapore launch, she said the city-state has garnered a lot of attention for being the new financial centre of Asia. “We want to position ourselves as the go to platform for pre-IPO investing for Family Offices and private funds. We have establishment in Silicon Valley and China already and would like to expand our footprint in Southeast Asia, and Singapore is our first stop in the region.”