Mark Lee: Hey, Owen, and recall that when we announced Forge Pro, we also mentioned how now there’s a live real-time order book. So as Kelly mentioned, connecting Europe to the Forge Global order book, now you’re a customer in Europe and you’re putting in your IOIs. Now you can see real-time kind of your IOI reflected and you kind of see how the spread and business offers are changing.
Owen Lau: Got it. And then just a broader question about the transaction volume going forward. So there were some positive data points in the first quarter. You talk about number of companies with IOI went up quite a bit, I think 12% sequentially. Bid/ask spread remained below historical average level. And even IPO markets were improving in the first quarter. I mean, it looks like the next rate movement, it’s going down, not up. I guess my question is, what else you think investors and issuers need to see to support more transactions? Do you think there’s still some kind of psychological barrier on valuation? It’s still need to come down because the last funding round was so high. I mean what things people have to see to support higher transactions from here? Thanks.
Kelly Rodriques: Mark, why don’t you take this?
Mark Lee: Yes. Look, so, Owen, I think it’s a great question. And by the way, before I answer that question, let me point out that when we talk about improvement in Q1 over Q4, historically, Q4 is always the strongest quarter of a year. And that typically when we go into Q1 of the next year, typically the following Q1 is a little bit lower than Q4 because some of the investors are trying to squeeze in their trades into their calendar year. And that’s pretty common in the public market as well. So I mean, if you look historically, that’s always been the case for us that Q4 is strong this quarter and Q1 is a little bit weaker. The only exception was 2021, but 2021, of course, was an exceptional year with zero interest rates and all-time high IPOs drag listings and SPACs in Q1 of 2021.
So that’s something else I would add that we’re really proud of our performance in Q1, particularly given that typical seasonality that you see quarter-over-quarter. But as far as continued growth in our volume throughout the year, I think, we’re feeling very good, as Kelly’s talked about, coming out of the winter, right? All believe me, indicators are trending positive, that the spread coming down. Now, one thing about the spreads, we talk about 9.5% versus 11.6% is the four-year average. The average spread in 2021, which was a unique year, was 5.5%. So I think we feel very good about a 9.5% spread, but as the market improves, we could see improvement on the spreads as well. As far as IOIs, we talked about that earlier, we are seeing very encouraging signs on the IOI side.
The IPO side of the business, as we all know, I mean, there was good improvement in Q1. In our FIO, we talked about 49 IPOs in Q1 of 2024 compared to 33 year-over-year, a 48% improvement. And there’s – the recent IPOs that we all know and upcoming IPOs, [fanatics, plaid, stripe, carna, liquid, death] being talked about, right? But we still need to see that play out, right? We saw some encouraging signs in IPOs in 2023, and it kind of fizzled. So we’re continuing to watch the IPO market. And then finally, you talked about valuations and performance. I mean, we’re encouraged by the performance of the Forge Private Market Index turning positive. We’re 0.5% in Q1. But when you look at our valuation data in the PMU, the valuations that are trading right now, they’re still in line with the discounts you’ve seen in the past, right, a 51% discount for the last round at the median.
And so I still would think that it would be helpful and the IPOs will help this in terms of people’s expectations that valuations in the private market are improving and recovering. It kind of relates to the great reset. Right now, we’re saying that if you look at companies that have raised capital, then out of our universe, that 62% of the companies that we track, the last time they raised capital was mid-2022 or earlier. So there’s still a lot of companies that haven’t raised capital in a little bit of time. And I think the great reset will also help, right? It will help to right-size the valuations of companies. It’s an important part of price discovery. And I think that’s one of the components that will also help to drive greater confidence in trading volume going forward.
So to sum up this very lengthy answer, there’s a lot of factors, we’re encouraged by a lot of the signs, we still think there’s room and opportunity in order to kind of drive significant order of magnitude increases in our trading volumes.
Owen Lau: Got it. Thanks a lot.
Operator: There are no further questions at this time. I’ll turn the call back over to Mr. Dominic Paschel.
Dominic Paschel: Thank you, Jericho, and thank you, everyone, for joining the Forge’s first quarter 2024 financial conference call. We look forward to engaging with analysts and investors throughout the second quarter, and we’ll be attending Accuidity conferences throughout that time. As always, feel free to reach out to myself and the team. Until then, enjoy the coming summer. We can close the call, Jericho.
Operator: Yes, and this concludes today’s conference call. You may now disconnect.
