In just three months of 2026, the secondary market has repriced and broadened significantly — now encompassing not only established growth-stage software leaders, but also earlier-stage, high-potential hardware and 'real world' companies.
Q1 2026 was a defining quarter. The S&P 500 fell 5%, dragged down almost entirely by eight mega-cap names that Paul Kedrosky dubbed the “Hateful Eight.” The private secondary market told a different story: the LBX25 Index rose 10%.
What’s emerging across both markets is structural convergence. Redpoint’s 2026 market update captures it well: the public market is starting to behave like the private market. Valuations of SaaS companies are no longer tethered to last quarter’s fundamentals—they’re being driven by future potential. For years, venture investors priced companies on what they might become. Now public investors are doing it too.
And the liquid segment of the private market is behaving like the public one. Bloomberg reported that secondary investors are no longer enthusiastic about OpenAI. Secondary investor sentiment is becoming a public narrative just days after a new primary round.
From Hype Investing to FOMO Investing
By the end of 2025, the secondary market was defined by hype investing: a bid-heavy market for the most popular names, with investors buying at premiums. In three months, the picture changed dramatically. The market is more ask-driven now, and we’re back to deeper discounts.
The sector-level data makes this stark:
Only AI Infrastructure still trades at a premium—and even that has compressed from 20% to 6%. Every other sector has moved deeper into discount territory. The correction is broadest in Cyber, SaaS, and Crypto, where discounts now exceed 50%.
The Market Got Less Concentrated
The shift isn’t just about pricing—it’s about breadth. The activity share of LBX25 companies on the platform has declined significantly, from 71% at its October 2025 peak to just 45% at the start of April 2026.
Bid share—the percentage of activity driven by buyers rather than sellers—reveals where conviction remains and where it’s evaporating. In Q1, the biggest names saw a sharp drop in buyer interest.
Neuralink is the standout—the only major name where bid share actually increased, from 74% to 80%. OpenAI saw the most dramatic reversal: from 68% bid share in Q4 to just 17% in Q1 - a company that went from being the market’s most coveted ticket to overwhelmingly ask-driven in a single quarter. Anthropic dropped from 45% to 19%, though that reflects the broader AI sector repricing rather than company-specific deterioration—Anthropic’s ARR is closing fast on OpenAI’s, and its secondary demand is running hot relative to peers.
For 2026’s most anticipated and capital-hungry names, the playbook is FOMO investing. Nasdaq announced a “fast entry” rule (effective May 1, 2026) that would allow SpaceX to enter the Nasdaq-100 as soon as 15 days after IPO—down from the current 3+ months. The fund manager dynamic is career risk and benchmark herding: once SpaceX is in the index, every fund benchmarked to it must buy it.
Shift in demand
The secondary market is positioning for what comes next as the previous AI/SaaS leaders lose momentum. AI’s share of bid dollars in quarterly demand is still the largest but shrinking. Meanwhile, SpaceTech, HealthTech, Defence, CloudTech and DevOps, Robotics, and Mobility tech have all risen.
Still, the bid share data captures where sentiment is heading, not where capital has arrived already.
The Emerging Cohort: Defense, Robotics, Energy, and Space
The public market has a narrative taking shape: the development of robotic and space technology is merging, creating an entirely new space economy. The latest All-In podcast laid out the thesis—robots in space, autonomous manufacturing in orbit, the eventual convergence of Tesla and SpaceX into something larger. In the private market, it’s already happening.
In Q1, the cohort of bid-heavy emerging tech companies widened significantly. These are companies outside the LBX25 where buyers overwhelmingly outnumber sellers (bid volume ≥$1M, depth >10 over three months). The emerging tech cohort overall accounts for around 10% of bid volume in Q1 2026.
The companies attracting bid interest today — fusion reactors, brain implants, hypersonic weapons, reusable rockets, humanoid robots — carry a fundamentally different profile from the late-stage software names that defined the secondary market in 2025. These are capital-intensive, long-duration, high-execution-risk bets. Secondary investors appear to be following early VC conviction, importing venture-style risk into a strategy historically built around nearer-term growth leaders with higher-visibility exits.
It’s encouraging to see that in 2026, the secondary market has broadened significantly — now encompassing not only established growth-stage software leaders, but also earlier-stage, high-potential hardware and ‘real world’ companies. That said, disciplined portfolio construction is more important than ever; avoiding single-name concentration isn’t just prudent, it’s essential.
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