Secondary trading of private market securities set a “blistering pace” during the first quarter of 2026, according to a recent report.
The activity was driven by the hot artificial intelligence (AI) Market as well as an expectation that the initial public offering market will pick up later this year.
Compiled by private securities trading platform EquityZen, now part of Morgan Stanley (NYSE:MS), the report notes that while there was significant market volatility on the public side, with indices trading down a record-breaking $300 billion, $300 billion went into startups during the quarter.
At the same time, the funding mainly went to more mature private firms like OpenAI, which raised $122 billion during the quarter – the largest VC round ever.
Late-stage funding was pegged at $246.6 billion, up over 205% year-over-year, while early-stage funding was up 41% year-over-year.
Mergers and acquisitions were robust as well, with first-quarter activity being the third-highest quarter since 2022.
EquityZen notes that while public markets anticipate more issuance activity later this year, private investors are committing funds now. The platform stated that following a strong Q4 2025, investors’ indication of interest jumped by almost 25% during Q12.
To quote the report:
“Artificial Intelligence retained its crown as the #1 most sought-after sector on EquityZen in Q1, a position it has held uninterrupted for over two years. However, the rest of the industry leaderboard saw a dramatic reshuffling that heavily favors frontier technology and physical infrastructure.
Aerospace trended up to the #2 spot, while Manufacturing climbed steadily to #4 (from #6 in Q4 2025), illustrating a shift toward “hard tech”. Meanwhile, traditional software and financial technology categories continue to cede ground to these capital-intensive sectors, with Fintech dropping to #5. We also saw a slight rebound for SaaS, which ticked up to #6.”
Defense and robotics merit a shout-out, understandably so. This sector saw the most dramatic rise in interest from private securities investors.
The energy sector, too, saw increased interest, driven by the insatiable need to power the growing number of data centers necessary to keep the AI sector moving.
The increase in interest and trading in private securities has caused the spread, or market discounts, to shrink. EquityZen shared that at the end of 2025, there was a 29% discount compared to 49% discount at the beginning of 2024.
Additionally, buyers are now willing to pay a premium for “high conviction assets.”
“In Q1 2026, 34% of secondary trades on EquityZen executed at a premium to the company’s last primary funding round, a significant jump from just 19% at the end of 2025.”
EquityZen shares that disciplined investors can still find value in private secondaries even while interest is high for hot sectors like AI, with buyers willing to pay a premium prior to an anticipated public offering.