For years, Australia’s startup ecosystem has been outlined by a well-known pressure.
We’ve turn into more and more good at constructing globally aggressive expertise firms, however far much less efficient at offering liquidity to the individuals who constructed them. That pressure is now coming to a head and the price of inaction is turning into unimaginable to disregard.
Over the previous 12 months, secondary transactions – the shopping for and promoting of current shares in personal firms – have shifted from an occasional workaround to a structural characteristic of Australia’s enterprise market. Current consideration on SecondQuarter’s third fund helped quantify this transformation, predicting a US$2.6 billion liquidity alternative inside Australian expertise firms over the approaching years.
Whereas estimates differ, the route is obvious: delayed exits have created a rising backlog, and secondaries are more and more the mechanism by which that strain is launched.
Fewer exits, longer timelines
This shift can’t be understood with out acknowledging how dramatically exit timelines have stretched.
Globally, startups are staying personal for longer. IPO home windows have narrowed, M&A exercise has turn into extra selective, and lots of venture-backed firms now function at significant scale for years and not using a conventional liquidity occasion. Information from Carta’s State of Startups 2025 reveals a constant sample: later-stage firms are taking longer to succeed in an exit, whereas funds and workers stay locked into illiquid positions for prolonged durations.
Australia will not be proof against this development. In reality, the impression could also be extra pronounced in a smaller ecosystem, the place enterprise funds raised within the latter half of the 2010s at the moment are reaching the later levels of their life cycles. Many of those funds maintain stakes in profitable companies which are rising, worthwhile, and globally related – however not but liquid.
The result’s a mismatch with actual penalties. Capital, expertise and worth creation are all current, but liquidity stays scarce. Founders who’ve constructed for a decade can’t diversify private threat. Early workers watch paper wealth develop whereas payments come due. Early-stage traders face LP strain to return capital from funds that also maintain unrealised good points.
Can secondaries fill the gaps?
Traditionally, secondaries in Australia had been episodic. They occurred quietly and often, usually pushed by particular person circumstances quite than systemic want. Right this moment, nevertheless,secondary transactions are more and more getting used to handle three structural pressures.
First, founders and early workers are in search of partial liquidity after a decade or extra of constructing. That is much less about exiting, and extra about de-risking private stability sheets whereas persevering with to steer and develop the corporate.
Second, early traders and enterprise funds face constraints of their very own. As funds age, restricted companions anticipate distributions-even if the underlying firms stay personal. Secondaries present a method to return capital with out forcing untimely exits.
Third, firms themselves have gotten extra deliberate about managing possession. Reasonably than leaving liquidity to likelihood, a well-structured secondary course of can scale back friction, retain key individuals and align long-term incentives. On this sense, secondaries are more and more a marker of Australia’s maturing startup ecosystem.
Australia’s expertise sits inside a broader international context. Internationally, secondary markets have expanded quickly, supported by specialist funds and institutional capital. The latest shut of a US$17 billion international secondaries fund by Coller Capital is considered one of a number of indicators that secondary liquidity is not area of interest, however a core element of personal market infrastructure.
From opportunistic to strategic
One of the notable modifications lately has been the rise of structured tender presents. Reasonably than casual bilateral trades, extra Australian startups are working coordinated secondary processes with outlined pricing, eligibility and governance. This mirrors earlier developments within the US and Europe, the place secondaries advanced right into a recognised a part of the enterprise toolkit as markets matured.
Carta’s data displays this shift. In international markets, secondary transactions are more and more standardised and carefully aligned with company-led resolution making, quite than pushed by investor urgency. Whereas Australia stays earlier on this evolution, related patterns are starting to emerge.
Importantly, structured secondaries profit the ecosystem as an entire. They supply readability for workers, consistency for traders, and larger management for firms. Over time, this reduces friction and uncertainty round ownership- significantly as cap tables develop bigger and extra advanced.
What this implies for Australia’s ecosystem
Secondaries is not going to exchange IPOs or M&A anytime quickly. However as exit timelines lengthen, they might help rebalance the system.
A deeper secondary market can assist founder retention, and over time, make enterprise capital a extra resilient asset class. It may possibly additionally be sure that success in Australian expertise firms interprets into tangible outcomes for the individuals and establishments that underpin it. For an ecosystem that has spent the previous decade centered on firm creation, the subsequent section will more and more be about capital circulation.
Secondaries will not be a silver bullet. However as liquidity strain builds, they’re more and more performing as the discharge valve Australia’s startup market wants.
- Angus Killian is Director of Gross sales & Go-To-Market at Carta.
