For years, Australia’s startup ecosystem has been defined by a familiar tension.
We’ve become increasingly good at building globally competitive technology companies, but far less effective at providing liquidity to the people who built them. That tension is now coming to a head and the cost of inaction is becoming impossible to ignore.
Over the past 12 months, secondary transactions – the buying and selling of existing shares in private companies – have shifted from an occasional workaround to a structural feature of Australia’s venture market. Recent attention on SecondQuarter’s third fund helped quantify this change, predicting a US$2.6 billion liquidity opportunity inside Australian technology companies over the coming years.
While estimates vary, the direction is clear: delayed exits have created a growing backlog, and secondaries are increasingly the mechanism through which that pressure is released.
Fewer exits, longer timelines
This shift cannot be understood without acknowledging how dramatically exit timelines have stretched.
Globally, startups are staying private for longer. IPO windows have narrowed, M&A activity has become more selective, and many venture-backed companies now operate at meaningful scale for years without a traditional liquidity event. Data from Carta’s State of Startups 2025 shows a consistent pattern: later-stage companies are taking longer to reach an exit, while funds and employees remain locked into illiquid positions for extended periods.
Australia is not immune to this trend. In fact, the impact may be more pronounced in a smaller ecosystem, where venture funds raised in the latter half of the 2010s are now reaching the later stages of their life cycles. Many of these funds hold stakes in successful businesses that are growing, profitable, and globally relevant – but not yet liquid.
The result is a mismatch with real consequences. Capital, talent and value creation are all present, yet liquidity remains scarce. Founders who’ve built for a decade can’t diversify personal risk. Early employees watch paper wealth grow while bills come due. Early-stage investors face LP pressure to return capital from funds that still hold unrealised gains.
Can secondaries fill the gaps?
Historically, secondaries in Australia were episodic. They occurred quietly and infrequently, often driven by individual circumstances rather than systemic need. Today, however,secondary transactions are increasingly being used to address three structural pressures.
First, founders and early employees are seeking partial liquidity after a decade or more of building. This is less about exiting, and more about de-risking personal balance sheets while continuing to lead and grow the company.
Second, early investors and venture funds face constraints of their own. As funds age, limited partners expect distributions-even if the underlying companies remain private. Secondaries provide a way to return capital without forcing premature exits.
Third, companies themselves are becoming more deliberate about managing ownership. Rather than leaving liquidity to chance, a well-structured secondary process can reduce friction, retain key people and align long-term incentives. In this sense, secondaries are increasingly a marker of Australia’s maturing startup ecosystem.
Australia’s experience sits within a broader global context. Internationally, secondary markets have expanded rapidly, supported by specialist funds and institutional capital. The recent close of a US$17 billion global secondaries fund by Coller Capital is one of several signals that secondary liquidity is no longer niche, but a core component of private market infrastructure.
From opportunistic to strategic
One of the most notable changes in recent years has been the rise of structured tender offers. Rather than informal bilateral trades, more Australian startups are running coordinated secondary processes with defined pricing, eligibility and governance. This mirrors earlier developments in the US and Europe, where secondaries evolved into a recognised part of the venture toolkit as markets matured.
Carta’s data reflects this shift. In global markets, secondary transactions are increasingly standardised and closely aligned with company-led decision making, rather than driven by investor urgency. While Australia remains earlier in this evolution, similar patterns are beginning to emerge.
Importantly, structured secondaries benefit the ecosystem as a whole. They provide clarity for employees, consistency for investors, and greater control for companies. Over time, this reduces friction and uncertainty around ownership- particularly as cap tables grow larger and more complex.
What this means for Australia’s ecosystem
Secondaries will not replace IPOs or M&A anytime soon. But as exit timelines lengthen, they can help rebalance the system.
A deeper secondary market can support founder retention, and over time, make venture capital a more resilient asset class. It can also ensure that success in Australian technology companies translates into tangible outcomes for the people and institutions that underpin it. For an ecosystem that has spent the past decade focused on company creation, the next phase will increasingly be about capital circulation.
Secondaries are not a silver bullet. But as liquidity pressure builds, they are increasingly acting as the release valve Australia’s startup market needs.
- Angus Killian is Director of Sales & Go-To-Market at Carta.
