Rethinking secondary transaction discounts in Indian start-ups

Pricing of secondary transactions in Indian Start-ups aligns with primary round pricing.

In brief

• Contrary to the expectations, 85% of secondary transactions occurred at par with concurrent primary rounds.
• In instances where discounts were observed, they were within a narrow range, with an average discount of 19% and a standard deviation of 9%.
• These discounts were not significantly influenced by the size of the stake sold, the transaction value, or whether the buyer was an existing or new investor. However, smaller companies saw slightly lower discounts than larger ones.
• These trends are in line with findings from our previous study released in 2024.

Secondary transactions are an important liquidity avenue in India’s startup ecosystem, particularly for founders, employees, and early investors navigating long gestation periods before exits. However, it is an assumption that secondary share sales almost always come at a discount to primary funding rounds. 

To examine whether this assumption holds true, our latest study analyzes observed discounts in secondary transactions across new-age companies, drawing on data from  ~650 funding rounds between January 2019 and December 2025.

In many cases, either the expectation of a binary outcome (that is, a high-value exit or complete failure) or strong investor confidence, favorable exit expectations, and competitive funding environments lead to parity pricing between primary and secondary transactions. For founders and early investors, this suggests that secondary liquidity can often be achieved without significant value erosion—especially in high-growth scenarios. 

No discount in most cases while moderate discounts when present

In an analysis of 306 concurrent primary and secondary transactions, 85% of secondary transactions were priced similarly to primary rounds, demonstrating that secondary sales are not universally discounted. However, in 15% of cases where a discount was observed, the average markdown was 19%, with most transactions showing a discount in a narrow range around the average.

Discounts are consistent across investor types and deal profiles 

Discounts (when present) appeared across all types of deals and investor profiles. The buyer profile (common vs. new investor) did not materially impact whether a discount occurred or how large it was.

Discounts were observed among companies of all valuation sizes, albeit lower for smaller companies

Discounts were observed across companies of all valuation sizes, from smaller startups to large companies. However, the magnitude of the discount tended to be slightly lower for smaller companies, likely due to the higher probability of binary outcomes. 

No significant relationship between stake size, deal size and secondary discounts

The data showed no significant correlation between the percentage of equity stake sold or the absolute deal size and the discount level. This suggests that the decision to discount a secondary price wasn’t driven by how big the sales were, but rather by other factors (like expectations of the company’s trajectory).

Secondary discounts were marginally reduced during the COVID-19 period

An interesting temporal trend was noted: during the COVID-19 years (2020–2021), secondary discounts were slightly lower on average (~18%) compared to other years (~21%). This indicates that in the pandemic-era funding environment, secondary investors were paying price closer to primary-round valuations (perhaps due to high investor optimism and liquidity chasing startups during that period). Outside of those years, discounts were a bit higher on average, though still not the norm in most deals.