Private stock marketplace Forge could strike SPAC deal or IPO in 2021 – sources

Forge Global Inc., a San Francisco-based private securities marketplace, is considering a public listing through an IPO or a special purpose acquisition company merger, two people familiar with the discussions said.

SPACs are calling the company, and Forge could strike a deal as early as this year, according to the sources. Its revenue is roughly $200 million, the sources said. Forge is also profitable, according to one of the people. The sources, who work in the financial industry, asked not to be named because the information is not public.

Forge announced on May 4 it raised over $150 million in its latest funding round, which brings its total funding to over $250 million. Its investors include Deutsche Börse AG, Temasek Holdings (Pte.) Ltd., Wells Fargo Strategic Capital, BNP Paribas SA, Financial Technology Partners LP, Draper & Associates Inc., Peter Thiel, Munich Re Ventures LLC and LUN Partners Group.

It may also attract M&A interest from strategic acquirers, such as broker/dealers and exchanges, one of the sources said.

Forge declined to comment.

Founded in 2014, Forge operates a secondary marketplace for securities of private companies that have high growth and gear toward an IPO. It provides liquidity for existing stockholders to cash out their shares and gives the companies access to external investors in the secondary market. It also offers custody and settlement services for private companies and institutional investors.

Forge posted $730 million in transaction volume in the first quarter, which the firm described as "record-breaking" in a press release. Since inception, it has facilitated over $9 billion in transactions covering nearly 400 private companies' stocks, according to the release. The asset class, which includes more than 600 global unicorn companies with a total of some $2 trillion in valuation, is still highly illiquid.

In November 2020, Forge completed the acquisition of key competitor SharesPost Inc. in a cash-and-stock deal worth $160 million. Among incumbent players, Nasdaq Inc. founded NASDAQ Pvt. Market LLC in 2013, originally as a joint venture with SharesPost. SharesPost sold its stake in 2015. Nasdaq Private Market reported $1.7 billion in transaction value over 29 transactions in the first six months of 2020, according to a press release.

Forge's interest in hitting the public market comes as a large number of SPAC vehicles are hunting for fintech targets. According to data from S&P Global Market Intelligence, 40 SPACs listed in 2021 are dedicated to seeking a target in sectors related to fintech.