Pre-IPO marketplace Forge Global will go public in $2 billion SPAC deal

The deal with Motive Capital Corp. values ​​the resulting company at $2 billion, the companies said. If completed, the transaction would make Forge the first dedicated trading platform for private shares to become a public company.

Trading in private stocks has heated up in recent years as startups have waited long to hold an initial public offering. This type of business allows employees to capitalize on their shares and gives some investors early access to potentially rapidly growing technology startups.

Most individual investors are not able to buy shares on Forge or other trading platforms for pre-IPO stocks. Under Securities and Exchange Commission regulations, such deals are generally limited to accredited investors—people who meet certain asset criteria, such as excluding one’s home, with a net worth of more than $1 million. or annual income above $200,000.

“The public markets need an investment that is a proxy for the private markets,” Forge chief executive Kelly Rodrigues said in an interview. “It’s the forge.”

San Francisco-based Forge said it has nearly 400,000 registered users, including more than 123,000 accredited investors. The remaining users are mostly from private companies selling shares and professional investment firms.

The Forge was called Equidate before rebranding in 2019. According to the company, since its founding in 2014 it has handled more than $10 billion worth of trades in more than 400 companies. It owned Lyft Inc., Palantir Technologies Inc. before going public. and Robinhood Markets Inc. Brokerage in shares of companies like Forge’s Markets is registered with the SEC as an alternative trading system, a more lightly regulated type of trading platform than a full stock exchange.

Many other companies try to bring together buyers and sellers of private shares. These include Carta Inc., Clearlist, EquityGen Inc., Nasdaq Private Markets and Zambato Inc. Last year, Forge acquired SharePost, an old rival.

Many pre-IPO trading platforms do not disclose data on their volumes or the number of their users, which makes them difficult to compare. Nasdaq Private Markets—the Nasdaq Inc.’s trading platform for private stocks—says it has executed trades totaling more than $30 billion. But unlike Forge, the Nasdaq Private Market has mostly focused on tender offers, outright deals in which a private company or large investor seeks to purchase shares within a specified period of time.

In July, Nasdaq said it was turning Nasdaq Private Market into a stand-alone company that would receive investments from a group of banks that include Goldman Sachs Group Inc. and Morgan Stanley.

Forge’s deal with Motive Capital is expected to close later this year or early 2022, subject to approval by shareholders and regulators, the companies said. In a SPAC deal, a private firm merges with a publicly traded shell company and gets its position on the stock exchange.

Motive Capital is sponsored by Motive Partners, a private-equity firm specializing in financial technology. SPAC’s CEO is Blythe Masters, a former senior executive at JPMorgan Chase & Company. He is set to join Forge’s board after the deal.

Forge expects to raise more than $500 million from the deal, which includes cash held by SPAC and a $120 million private investment in public equity, or PIPE. Contributors to PIPE include ION Investment Group Limited, a Dublin-based financial software and data company; Motive Partners; and Temasek Holdings Pte. Ltd., the state investment firm of Singapore.

Temasek was already an investor in Forge. Forge previously received investments from German exchange operator Deutsche Börse AG and Wells Fargo & Co.

This story has been published without modification to the text from a wire agency feed