SecondMarket, which claims to be the largest secondary market for illiquid assets — shares in pre-IPO and lockup-period companies, auction-rate securities, bankruptcy claims, structured products, warrants and restricted stock, whole loans, etc. — announced that it brought in a $15 million second round of venture capital today.
The Hong Kong-based Li Ka-shing Foundation and Singapore-based Temasek Holdings (through its Dunearn Investments subsidiary) each invested $7.5 million. SecondMarket CEO Barry Silbert said in a prepared statement, “We identified a tremendous opportunity for SecondMarket in various Asian markets, and as we grow our business, to add new asset classes and expand internationally.”
Silbert told the Wall Street Journal that 10 to 15 percent of SecondMarket’s business now comes from outside America, and that the company has seen a “real increase in interest coming from Asia.”
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Hence the new Pacific Rim investors. They’re huge: LKSF has 220,000-plus employees in 54 countries. Temasek manages a $119 billion portfolio.
SecondMarket VP Mark Murphy said in a phone interview that SecondMarket has been profitable since 2005, and traded just under two billion dollars’ worth of assets in 2009. The company doesn’t do nickle-and-dime deals. Their average transaction price is around $1.5 million.
Former Facebook employees sought out SecondMarket last year to cash out while the company was valued as high as $5 billion. SecondMarket claims around $150 million in private company share sales for Facebook and others.
As for the new investors, Murphy said, “It wasn’t really about the money. It was the strategic opportunity. Asian markets are based a lot on who you know. These guys were interested in helping us develop our markets over there. You couldn’t ask for better partners than Mr. Li and Temasek.”
New York-based SecondMarket, founded in 2004 as Restricted Stock Partners, previously received an unspecified amount of funding from FirstMark Capital in September 2007.