The secondary companies market has been on the same rollercoaster ride as the broader VC market in recent years, but it looks poised to break free in 2023.

Like venture capital as a whole, the secondary market was hot in 2021 with a ton of new entrants – does that sound familiar? — entered the space as crossover investors and traditional VCs looked to buy secondary interests as a way to get into hot deals where they couldn’t access primary stocks. As the market turned in 2022, secondary deals fell to the same volume as their venture counterparts amid mismatched valuations and expectations.

But while it’s unclear whether the venture market has bottomed — some investors think it has, while others fear the worst is yet to come — secondary deals are breaking through. Data shows that transactions started picking up again in the second half of 2022, and multiple investors think 2023 could be a great year.