Why invest in private technology

Perspectives on private markets, technology, and long-term value creation

For much of the 20^th and 21^st Centuries, technology adoption has been one of the dominant drivers of both economic growth and investment returns¹. Successive technology shifts including semiconductors, mobile internet, the cloud and, most recently, artificial intelligence, have driven significant growth. They have also created many of the world's largest and most profitable companies. This has resulted in eight of the ten largest companies in the S&P 500 currently being technology companies², up from only two companies only twenty years ago.

Value creation in public vs private markets

A result of this trend is that investing in S&P 500 has been one of the most reliable sources of returns for investors in recent years. The annual returns from the index have been 10.8% since 2015. These returns have been dominated in turn by companies such as Nvidia, Amazon and Apple. While all the eight largest companies began their lives as small venture capital-backed companies, the bulk of their returns were generated in public markets. Amazon and Nvidia are good examples with estimated return multiples in excess of +2,500x and +5,000x respectively since their listing compared with 86x and 37x in the private markets.

As these large technology companies have grown, so too have private markets. Until relatively recently, start-ups looking to access funding of $100m+ had little choice but to turn to public markets and complete an IPO early in their development. This has changed and private markets now outstrip public markets in terms of their ability to fund fast-growing technology companies. Today, companies such as OpenAI have raised nearly $200bn³ without going public. As a result, Start-ups have chosen to stay private longer. Recent evidence suggests technology companies often remain private for around twelve years, versus roughly five years in earlier decades.

This shift has reduced both the number of frontier technology companies listed on public markets and has meant that the valuation of such companies has reached record highs by the time they go public.

To illustrate this trend, one needs to look no further than SpaceX. The company was valued at $1.8Tn at its IPO with all this value being captured by private markets. According to the Economist, for SpaceX to match Amazon's return, it would need to achieve a valuation of $470Tn, a challenge even for Elon Musk! To match Nvidia's post-IPO returns, its valuation would need to reach nine quadrillion dollars!

As a result of these shifts, investors looking to capture the returns of fast-growing technology companies have turned to private markets to access companies at lower valuations than are possible in the public markets.

Access to frontier technologies

Another reason to invest in private technology companies is to access sectors at the frontier of technological innovation. In many cases, this may be the only way to access certain technologies. This is the case for much of artificial intelligence currently as well as robotics, and quantum computing. These sectors continue to be dominated by private businesses which, as we have seen, are staying private longer.

High-profile examples include OpenAI, Anthropic, Databricks, Stripe, ByteDance, Anduril, Helsing and Revolut, all of which have remained private while becoming leaders in their respective industries.

return potential

A final reason for investing in private technology companies is the potential to generate higher returns.

Returns are not uniform, and asset selection matters greatly. In addition, private technology companies are subject to a long list of risks including, risk of loss, illiquidity and the complexity of early-stage investing. But the broader point stands: carefully chosen venture and growth strategies can outperform both public and private-markets and offer exposure to the companies that drive disproportionate long-term value creation.

conclusion

Private technology offers three compelling advantages. It gives investors early access to the strongest growth companies, exposure to frontier technologies that may not yet be listed, and the potential for superior returns when capital is placed with the right companies and managers.

That does not remove the usual risks of illiquidity, valuation volatility, and company & manager dispersion. It does, however, make private technology an increasingly important allocation for investors who want exposure to the next generation of global winners before they eventually hit public markets.

The strategy is subject to the risk of capital loss. This communication does not constitute investment advice.

¹Federal Reserve Bank of Cleveland, Technology and Productivity Growth", March 12, 2004. S&P Returns 2015-2025
² S&P 30/06/2026
³ Source: PitchBook, 29 July 2026

Sources:

Companies Are Staying Private Longer: Why It Matters | VanEck

Companies Are Staying Private Longer: Why It Matters

Private Markets Are The New High-Growth Public Markets

Growth Investing in Private Markets: Trends and Transparency - MSCI

Why Companies Are Staying Private Longer

Why companies stay private longer and what that means

After AI, markets are already betting on the quantum revolution

Meet the 22 Investors to Know in Robotics and Physical AI

Top Quantum Computing Investors in 2026

Insights: 10 Of The Most Valuable Private Companies In 2025

Private Capital in Focus: Venture Capital's Comeback Year

Tech and healthcare drive venture capital boom

The Economist: Giga-IPOs are a symptom of public markets' giga-problem

Pitch book: All figures at 03/09/2026

Ritter, J.R. (2026). Initial public offerings: VC-backed IPO statistics through 2025. University of Florida