The Rise of Secondaries in India: How the Quiet Market Became the Smartest Game in Town
Remember when selling your private holdings was seen as taboo - almost like admitting you’d lost faith in the startup dream? Well, that stigma is officially dead.
Welcome to 2025, where secondaries aren’t a backdoor anymore - they’re a boardroom strategy.
A Quick Recap: What Are Secondaries, Anyway?
In the simplest terms: secondaries are like passing the baton mid-race. An early investor or LP sells their stake in a startup (or fund) to someone else, unlocking Liquidity before the company exits.
Not long ago, this was niche - a workaround used quietly by investors needing cash or by founders wanting to diversify. Today? It’s mainstream. It’s structured. And it’s booming.
The Global Boom
Globally, the private secondary market hit $152 billion in 2024 - a 39% jump from 2023. And the first half of 2025 alone has already clocked $103 billion, putting it on track to surpass $210 billion by year-end.
What’s changed?
Investors are tired of waiting. High interest rates have kept IPO markets sluggish, and distributions from traditional funds have slowed to a trickle. So those sitting on paper gains but real cash crunches - found a smarter exit: the secondary market.
Meanwhile, buyers like BlackRock and StepStone have raised multi-billion-dollar secondary vehicles, snapping up assets at ~75% of NAV - up from the high-60s just two years ago. That’s confidence, not distress.
The India Angle: From Whisper to Wave
India isn’t far behind.
We’re seeing record activity in secondary transactions - from early investors in exciting legacy funds to those partially offloading stakes in growth-stage startups. A few years ago, if an investor sold even a small portion of their equity, the whisper would spread: “He’s cashing out. Something must be wrong.”
Today, it’s smart portfolio management. Liquidity is no longer a luxury. It’s a design feature. And with fund lifecycles stretching longer - thanks to delayed exits - LPs and GPs alike are embracing secondaries not as an emergency exit, but as a strategic liquidity tool.
The Two Engines Behind This Shift
LP-led transactions:
Limited Partners - think pension funds, family offices, endowments - are rebalancing. They’re selling old fund interests to free up capital for new commitments, managing exposure proactively instead of reactively. Up to 40% of secondary sellers in 2025 were first-timers - a sign of growing comfort and maturity.
GP-led deals (Continuation Vehicles):
On the other side, fund managers are setting up continuation funds to hold on to their best-performing portfolio companies longer. Why sell your winner at year 10 if it’s compounding beautifully? Roll it into a new vehicle, bring in fresh investors, and give existing LPs a choice: Cash out or stay in.
It’s elegant. It’s efficient. And it’s changing how fund performance is realised.
New Faces in the Game
Here’s the plot twist: It’s not just institutions anymore.
We’re seeing retail investors and wealth platforms entering this market via evergreen funds - vehicles offering periodic redemptions and ongoing capital calls. That means the secondary market - once locked away behind mahogany fund doors - is opening up to a wider base of investors who want private-market exposure without the decade-long wait.
From Taboo to Toolkit
A decade ago, liquidity was binary: you either exited through IPO/M&A or you didn’t. Now, liquidity is engineered.
Investor agreements increasingly include secondary transfer clauses and liquidity windows as standard features. Fund managers no longer treat secondaries as a distress move - they treat them as an optimisation lever.
This signals something important: The private markets aren’t just growing - they’re maturing.
Why This Matters for India’s VC Ecosystem
India’s VC ecosystem is at an inflection point.
Funds raised during the 2020-21 boom are reaching mid-life, yet exits remain sporadic. Secondaries are becoming the safety valve - easing pressure without killing conviction.
For founders, it means a chance to take some money off the table without losing skin in the game. For investors, it’s a way to stay liquid without giving up on India’s long-term growth story. For GPs, it’s another arrow in the quiver - a chance to recycle capital and keep backing ambition.
In short: it’s liquidity without compromise.
The Takeaway
Secondaries aren’t a symptom of a slowing market - they’re a sign of its evolution. When liquidity becomes part of the design, the ecosystem becomes stronger, not weaker. So yes, the IPO window might still be narrow.
But the liquidity window? It’s wide open - and it’s here to stay.
– Aakash Sood, CFA - Equanimity Investments