Clear Street Databricks pre-IPO plan opens access to $188 billion AI firm
Clear Street is preparing a private-market platform starting with Databricks as investors seek stakes before IPOs, CNBC reported.
By Maya Lindqvist · Senior Technology Correspondent
3 min read
Clear Street’s Databricks pre-IPO plan will give accredited investors a way to buy exposure to the AI software company before any public listing, CNBC reported. The move matters because more of the gains in fast-growing technology companies are occurring while those businesses remain private.
The fintech broker is preparing to introduce a platform for late-stage private-company investments, beginning with Databricks, according to CNBC. Databricks said this month it was raising strategic funding at a $188 billion valuation.
How will Clear Street Databricks pre-IPO access work?
Pre-IPO access means investors can buy an economic interest in a company before its shares trade on a public exchange. Clear Street’s platform is aimed at accredited investors, a category that generally covers people or institutions that meet wealth, income or professional standards.
Clear Street CEO and co-founder Uri Cohen told CNBC the firm wants to reduce the barriers that keep investors from buying more types of products. He said wealth creation has increasingly taken place in private markets, while retail and smaller investors have shown more interest in participating.
Cohen said Clear Street plans to handle servicing and risk management for the assets itself. That setup will allow the company to offer margin loans against eligible pre-IPO positions, which CNBC described as uncommon in private markets.
The firm expects to have as many as 30 startups on the platform by the end of the year, Cohen told CNBC. Most will be technology companies valued between $5 billion and $20 billion, and Clear Street is targeting companies that may be roughly six months to two years from an IPO.
Why are investors looking at private-company shares?
CNBC reported that startups are staying private longer, which means investors in public markets may miss a larger share of a company’s early growth. That has increased demand from wealthy investors seeking positions in companies such as Databricks, Anthropic and OpenAI before they list shares publicly.
Clear Street is entering a field that larger Wall Street firms are also pursuing. CNBC reported last week that Goldman Sachs created a platform to broaden private-company investment options for wealthy clients and family offices.
Clear Street also plans to add private-company equity research, led by analyst Owen Lau. Cohen told CNBC the goal is to bring more of the disclosure and analysis investors expect in public markets to a part of finance that has often had less available information.
What does this mean for Clear Street?
The private-market platform comes after Clear Street paused its own IPO plans. Bloomberg reported earlier this year that the firm was valued at nearly $12 billion in a private funding round, and CNBC reported that the company put its listing plans on hold in February during market volatility that hurt broker and fintech valuations.
Cohen told CNBC that Clear Street is cash-flow positive and strengthened its liquidity through a $400 million investment-grade bond sale. He said the firm has enough runway to build its private-market infrastructure and may look toward a 2027 listing, depending on market conditions.
This story draws on original reporting from CNBC.