Even during the tight financing conditions of 2023, Vancouver-based fintech startup Hiive had considerable interest for its first fundraising that closed last fall and is expecting a busy 2024 as it ramps up to grow in a more buoyant market.
Hiive is a marketplace that allows investors and employers to buy and sell shares of privately held venture-backed companies in the secondary market. Hiive focuses primarily on “unicorns” — companies valued at a billion dollars or more. It provides shareholders, typically former and current employees at these companies, the ability to list their shares for sale and buyers can make the bids directly — typically institutional investors and high-net worth individuals.
In September 2023, Hiive closed its first external capital of CAD $5.7 million in Series A financing from Uncorrelated Ventures, Splash Capital, Harmony Venture Partners, Hack VC, Agmen Capital, and Lending Club founder and Upgrade CEO Renaud Laplanche — the majority of which have already been using Hiive’s platform.
“I think it is fair to say that it has been the most difficult fundraising market that we’ve seen in a decade or so,” says Sarah Huggins. “I think it’s testament to the strength of the company and the product that we’ve built that we were able to raise this round in such a difficult fundraising market.”
As investors from the VC sector are also users of the private stock trading platform, Hiive benefited from being known in the community. At the time of the raise, over 150 institutional or high-net worth individuals expressed interest in investing with Hiive. Many of the Series A investors were already big users of the platform and saw the value.
Hiive was co-founded in 2021 by Sim Desai, Chief Executive Officer, and Prab Rattan, Chief Revenue Officer and head of Capital Markets, along with Sarah Huggins, Chief Operating Officer and General Counsel and Stuart Eccles, Hiive’s Chief Product and Technology Officer.
The platform allows the two parties to negotiate the terms with each other, with no need for a broker to get involved. Once the parties agree, the trade goes to the Hiive execution team who gets the transaction approved by the company and manages all the documentation and flow of funds involved with executing the trade, taking all that work off the company’s plate. From a user perspective, the whole system is automated, and the customer doesn’t need to call a broker, but they do have the support of a broker in the background to see the transaction through and help them along the way.
Advice to founders
Sarah advises founders and others in the startup ecosystem to have patience as the market continues to evolve and ramp up in 2024.
“We definitely had to have patience through this period,” she says. “And there’s opportunity in these tighter, more difficult periods — we’ve certainly seen a lot of innovation come out of difficult economic periods. We set out to build Hiive in a really tough time, while other people were able to build when there was unlimited cheap money. As a result, we had to be much more thoughtful and disciplined than we would have been at the height of the market.”
Working with Osler
When Sarah was considering who to engage with for legal counsel, a colleague at Hiive mentioned they had worked for another early-stage company and had a good experience with Osler’s Emerging High Growth Companies Group (EHG). Sarah knew EHG partner Ryan Unruch from law school and had a conversation with him about how the team works with startups.
“I started talking to Ryan about the type of work that the group did and how they could support us,” she says. “At first, I thought they might not even want to work with us, or that it might be too expensive, but that wasn’t my experience at all. Osler has innovative billing structures to support emerging companies. Spending money on an hour of legal services is something that I have to think about carefully, so I appreciate when the law firm I’m working with is thinking about that too.”
