Clear Street's strategic pivot
Clear Street, the prime brokerage startup that recently put its IPO on hold, is now offering investors an opportunity to stake claims in some of the fastest-growing private companies in Silicon Valley. The company is close to launching a platform that allows accredited investors to purchase interests in late-stage private firms, according to CNBC.
The platform will focus on AI firms, including Databricks, which received a valuation of $188 billion this month. Uri Cohen, the founder and CEO of Clear Street, stressed the aim to eliminate barriers and provide more people with access to high-growth investment opportunities.
Cohen noted that much of the wealth being created is now in private markets, and many retail and smaller investors are eager to take part. As more startups remain private for longer, most value creation occurs before an initial public offering. This trend has increased demand for access to companies such as Databricks, Anthropic, and OpenAI.
Structure and legal clarity
Investors will not buy Databricks stock directly through the Clear Street platform. Instead, they'll acquire a share in a special purpose vehicle (SPV) that holds a stake in a third-party fund. That fund, in turn, owns the actual stock. Databricks remains unaware of the SPV structure, and the official owner on record is that third-party fund.
Earlier in the year, AI startups like Anthropic took action against unapproved secondary transfers, shutting down SPVs and indirect share sales that violated corporate guidelines. Cohen assured that Clear Street will act as a counterparty and accept any risk involved. A Databricks spokesperson confirmed via email that the company has no involvement or connection with Clear Street.
Private market expansion and financial strength
By the end of the year, Clear Street aims to feature up to 30 startups on its platform, focusing on tech companies valued between $5 billion and $20 billion. These would typically be firms about six months to two years from an IPO.
To support the initiative, Clear Street is setting up a dedicated equity research team for private companies, led by analyst Owen Lau. This effort is designed to bring the clarity and transparency usually found in public markets into private ones.
Although the firm put its own IPO plans on hold in February, it continues to generate positive cash flow and increased liquidity through a $400 million investment-grade bond offering. Cohen explained the decision was strategic, and the company is aiming for a 2027 listing, depending on market conditions.