Forge Global at Citizens JMP Conference: Strategic Expansion Plans

On Tuesday, 04 March 2025, at The Citizens JMP Technology Conference 2025, Forge Global Holdings (NYSE: FRGE) presented a strategic overview highlighting both challenges and opportunities in the evolving private market landscape. CEO Kelly Rodriguez and Citizens’ Devin Ryan discussed Forge’s commitment to technology and data in making private markets more accessible, while acknowledging recent market volatility and future growth prospects.

Key Takeaways

• Forge Global is investing in a next-generation platform to enhance private market accessibility.
• The private market index, tracking the 75 largest names, rose over 30% in the last three months.
• Forge aims to achieve cash flow break-even by 2026 through efficiency gains.
• The company is expanding internationally, with a focus on Europe, and plans to introduce more standardized processes.
• Increased buy-side demand is driven by AI interest, IPO market reopening, and changing market dynamics.

Financial Results

• The "great reset" after 2021’s superheated valuations led to valuation declines in 2022 and 2023.
• By 2024, the market showed signs of recovery, with bid-ask spreads narrowing to 8%.
• Forge anticipates reaching cash flow break-even in 2026, aided by its next-generation platform.

Operational Updates

• Forge’s next-generation platform includes Forge Pro and Forge Data, targeting institutional clients.
• Automation innovations are a priority to accelerate market access.
• Efforts to standardize documents and processes aim to reduce transaction friction.
• Revenue from Forge Europe is expected to materialize in 2025.

Future Outlook

• Forge plans to roll out its next-generation technology in 2025 and beyond.
• The company is focused on expanding its international presence, particularly in Europe and potentially Asia.
• Forge is exploring opportunities for primary capital raising through its platform.

Q&A Highlights

• Increased buy-side demand is linked to AI interest and the IPO market reopening.
• Institutions are entering the private market for the first time, enhancing interest.
• Companies are embracing liquidity and providing more disclosure, altering market dynamics.
• The SPV theme is expected to grow, increasing market turnover and efficiency.

For more detailed insights, refer to the full transcript below.

Full transcript - The Citizens JMP Technology Conference 2025:

Devin Ryan, Head of Financial Technology Research, Citizens: I’m Devin Ryan, head of financial technology research here at Citizens. Really looking forward to this conversation with Kelly Rodriguez, who’s the CEO of Forge Global. For those that don’t know, Forge is a leader in the private markets and a company that we’ve been really excited about since coming public. So it’s a pleasure to have you back here, Kelly. I always enjoy the conversations with you.

And I think maybe just the best place to start for maybe folks who don’t know the story as well, just to introduce the company and, you know, what is the mission of Forge and and what do you guys do?

Kelly Rodriguez, CEO, Forge Global: Yeah. Great. Thank you. It’s a pleasure to be here. Thanks for having me.

As Devin said, we’re a private market marketplace, and we are a global business with investors and customers in about 78 countries. Our mission really was to develop the technology and infrastructure required to make this asset class an accessible asset class with informed data and to innovate the way investors around the world can participate in the private markets. And that includes what you would expect, which is direct investing into private companies that are pre IPO, but also to use data to enable innovative new products, products like index products and passive, assets that the same way you see in the public market. So we’ve been on a journey, and, the last few years have been heavily investing in what we call the next generation platform. Some of that has come out in the form of our innovative data products, but some of it, much of it is coming out in 2025 and 2026.

Devin Ryan, Head of Financial Technology Research, Citizens: Yes. Great. And before we get into the Q and A, I just want to remind everyone that Forged will be reporting earnings, I believe, tomorrow. So not going to ask anything around that. But and before we get into it, also, Mark Lee, is going to be moving to a new role, who’s the CFO, and you’ve recently brought on James Nevan, who is here as well.

So I’m not sure if you want to just give a quick introduction to James.

Kelly Rodriguez, CEO, Forge Global: Yes. Yes. James is here in the front row. Thank you, James, for coming and being here. James joined us from the London Stock Exchange with a ton of experience around really the shifting dynamic of of exchanges and exchange business models and spent much of his career in that transformation of exchange and data business at the LSC.

So he brings with him tremendous subject matter expertise, and understands what we’re up against and has been, you know, on the ground for all of about thirty, forty days. So really excited to have him. Mark will continue to support James and the company in an advisory capacity, but really excited to have him James on board now.

Devin Ryan, Head of Financial Technology Research, Citizens: Yes. Terrific. Welcome, James. Maybe just to start on the state of the private markets. It’s been a volatile last few years clearly and just capital markets overall have been quite volatile.

It seems like the IPO market is trying to reopen, and I think there’s an appetite for that to happen, albeit we need market to try to settle down here a little bit. But just love to get a sense of kind of the journey that you’ve seen in the private markets because Forge has been executing quite a bit head down over the last few years even as the market’s been challenged. So maybe talk a little bit about the market right now, and then I’m going to want to get into things that Forged specifically has been doing over that time as well.

Kelly Rodriguez, CEO, Forge Global: Great. So, everybody recognized what happened in 2021 just in terms of superheated valuations. The private market was, was a beneficiary of that period, and we saw the run up over the previous six or seven years. As ’twenty one came to a close and the war in ’twenty two kicked in, we saw a massive shift in pricing. And, we entered a period that we called the great reset, which is valuations coming down dramatically in the private markets and a lag between the the actual liquidity and realization of those valuations.

So the market was largely stagnant, and really was selling at very low volume in ’22 and ’23. What started to happen in ’twenty four is a thawing out. Of course, we started to talk about the tipping point. And what we see now in the market, you know, as reported by some of the data is, the bid ask spreads have now narrowed to about eight, which is the sign of a healthy market. We saw an incredible buy side demand in the last few months, the largest we’ve seen in the history of Forge.

And the private market index, which we track, the 75 biggest names is up over 30% in the last three month period. So this is absolutely a moment where, you know, we’re pretty confident in saying, the market’s back. But we are still in a market that trades pretty heavily on the top end, the top 60 names. We track, you know, five, six hundred, But, but that’s that’s kind of where we are. AI obviously has been a big theme in the last quarter as everyone would say.

Devin Ryan, Head of Financial Technology Research, Citizens: Yeah. Why do you think, you know, from the buy side, all the the increased attention? Is is that because there’s themes that that people more attracted to, whether it’s artificial intelligence or maybe cryptos now kind of getting reopened in The U. S? So is it thematic?

Or is it because now people are thinking the IPO market is going to reopen, so there might be a catalyst for an event that would create kind of a new valuation function for companies. Like, what do you see driving the renewed interest? Or is it just time that, you know, it’s been a couple of years and people kind of reset expectations. Now we need to start moving over moving forward with our lives and making decisions around investing.

Kelly Rodriguez, CEO, Forge Global: You know, it’s a it’s kind of a convergence of all of those things. I’d say last year, when AI started to really go off, people were very focused on on the big AI names. And and certainly, that’s been that’s been part of what’s driven, and that that that drove much of the index performance for sure in the last two, three quarters. But we’re also seeing just a broadening of interest, in terms of companies outside of AI. Crypto, obviously, highly sensitive to the pricing out there, but we’ve seen companies like Stripe and others that are starting to report valuation increases that are substantial.

So the market is turning in terms of valuation. And I think in a weird way, a lot of people are coming to the private market for the first time now. They they missed the last kind of ride up. And so I think it’s an asset class that a lot of institutions are now talking about that are moving into. So we’re seeing really the convergence of all of those things.

And you see it in, you know, in some of the big names. We we coined the the the the private Magnificent Seven late last year with SpaceX, OpenAI, Stripe, Databricks, Fanatics, Rippling, and Scale. And and these companies, if you look at how they’ve gone up, you can see in this graph, I don’t know if it’s up on the screen, but, incredible performance over the public, Mag seven, in the last year. So really a lot’s going on.

Devin Ryan, Head of Financial Technology Research, Citizens: Yeah. And just even in the last year, you’ve had some pretty interesting product announcements at the company on your next generation platform. So I guess, what does that mean? And you announced Forge Pro, Forge Data. Data seems like a big part of the strategy.

So just talk about some of the things you’ve announced and how you’re

Kelly Rodriguez, CEO, Forge Global: executing on your strategy over the past year. Yeah. Thank you for that. We believe, and I said this at the beginning, that the private market needs to have a next generation platform. I came into this industry from more of a software background.

And so I observed that the combination of not just pricing data and a trading venue, but a highly integrated and scalable platform needed to be built, and it couldn’t be done in a single year. Now we came public as the market was coming down, and we raised money, and we’ve been investing aggressively during a very difficult time for the private markets. But pro and the data play in general are meant to be, a utility for the market to help make investing decisions. The same way you would use advanced trading tools and data and analytics for the public market, we believe the private market needed that. I’d say the rest of the journey is really about building a highly automated experience.

So if you think about Vlad, who was just up here a second ago, talking about being technology first, against incumbents that are large, legacy players, we believe we’re at the dawn of a new asset class here, and we’re gonna build this greenfield capability around data and high automation. And that’s really what the next generation platform has been. Pro, is now being used by a significant number of our institutional clients because Forge does play both an institutional role and kind of a retail or high net worth, segment. And Pro was really launched last year to address institutional. I’d say what you should look forward to in the coming months and years is our automation innovation for the broader market and really accelerate access that way.

Devin Ryan, Head of Financial Technology Research, Citizens: Yeah. And how much of the market right now is individuals that are participating in the private markets buying and selling to each other versus employees of a company selling and then you find the buying liquidity. Like how much is it kind of a closed loop market versus you still need the sellers to show up, which are the, which are essentially the companies or people associated with the companies?

Kelly Rodriguez, CEO, Forge Global: Yes. It’s an interesting dynamic around the relationship between the various constituents in this market. What started out a few years ago was the market was primarily powered by employee sellers and people who were sophisticated enough to understand what they were getting into. Because obviously, beyond price discovery, there’s a lot of disclosure and opaqueness involved in investing in private companies. I’d say the last three years has seen a pretty steady and and evolution in terms of both participation and transparency.

One of the factors is companies are now starting to embrace the idea that liquidity is a reality for a private business that’s going to stay private for thirteen to seventeen years. That’s a massive shift in how long a company takes to actually go public. And so what comes with that is more disclosure and I think a willingness for companies to both allow and encourage liquidity at some point before they go public. Combine that with the fact that a lot of people are coming into the market who are looking at public market returns and saying, hey, you know, this company, that’s going public with a 5 or $20,000,000,000 valuation, this this looks like the size of a public company, you know, ten years ago that had been public for a long time. It’s now, you know, previously that company would have gone public at a valuation of $500,000,000 or $600,000,000 So if you want to get in early, if you want to catch that ride, you’re going to start looking down into private pre IPO companies.

And so that convergence is now changing the market dynamic and really it’s becoming less about, particularly at the high end, we run these SPV structures, which are fund structures that sit on a hundred cap tables of the largest private companies in the world. And those trade more like a traded stock where you’ve got people coming in and coming out that are not dependent on the employee base as much as maybe a company that just starts to trade for the first time.

Devin Ryan, Head of Financial Technology Research, Citizens: Yeah. So do you think that’s really interesting, the SPV theme, does that become a bigger part of this market? So you need the issuance, you need the market to get populated with shares essentially or with equity. But then you know, where it really becomes efficient and more like a public market, the turnover increases when you don’t have to have that complex and lengthy connectivity back with the company. Right?

And so, like, where where is that how things are evolving? And where are we in that process? Because it would seem like

Kelly Rodriguez, CEO, Forge Global: you can turn over more.

Devin Ryan, Head of Financial Technology Research, Citizens: There’s a lot more opportunity for

Kelly Rodriguez, CEO, Forge Global: What you’re describing now is the the tipping point where the market becomes more liquid. Yeah. And when it becomes more liquid, then it will trade more closely like a public market. And so the real question is, well, what drives that liquidity? And there’s really a couple of factors.

One I just described, which is the size and relative trading interest in the big single names. And those are really the top, twenty, thirty to 60 names. But the other thing, Devin, that we’re really excited about are some of these innovative products that are coming to market. We announced using our index a few months ago that a third party asset manager was gonna was gonna basically track our index to build a passive fund. Now when passive funds start tracking indexes in the private market, it will create additional liquidity for the underlying positions that that index holds.

So one such fund is called liquidity. We announced this last year, and yesterday, a liquidity filed with the SEC to put a 40 act non accredited tradable fund, out into the world. Again, products like that will bring people into the private markets that will create more liquidity, more exposure, and beyond the single names because we all know that what makes the public market liquid also are ETFs and indexes and other passive products that you can invest in. So we’re really excited about that development. Yes.

And then also thinking about kind of the sell side equation,

Devin Ryan, Head of Financial Technology Research, Citizens: talk about the work you’re doing with standardization of documents and just working with companies. So I think another from the outside challenge for the market has just been that there hasn’t been great standardization. And so therefore, that creates friction in the process of being able to transact. And also, there’s kind of an education curve for companies to get comfortable. But if you kind of can help standardize the process for them and say, hey, here’s what we’ve done for all these other companies and it’s very simple, that’s gonna increase their appetite, at least in my opinion, to wanna engage in transaction.

Kelly Rodriguez, CEO, Forge Global: This man is asking every question that someone would need to know to understand this space. I thank you for that. That’s that really is kind of the last mile question because it’s not surprising. It shouldn’t be surprising that so many people want to invest in AI. They want to invest in in in SpaceX or the big name megacorns that are private.

The challenge is to do this at scale with volume requires a structural shift in the way trading happens and the standardization of that has to do with companies plugging into these platforms. And so when we talked about the next generation platform, we talked about and thought about the strategy of formulating, an architecture that could trade globally and deal with the different regulatory regimes that buyers and sellers could be in, as well as the underlying process for automating how someone can accreditate themselves. You see this today on the crypto platforms, actually. Coinbase does this really well. Robinhood and others have have have managed to, blaze this trail, which is how do we know who you are, get yourself KYC’d, go through that process, and then hook that up into an integration with issuers which allow you to trade.

And that really is the final mile of the NextGen platform. This is what we what I say when I think about 2025 and twenty twenty

Devin Ryan, Head of Financial Technology Research, Citizens: election and it seems like private markets is an area that both sides of the aisle seem to be coming together on that investors should have protections, but also kind of improved access to investing solutions. How do you think about or I guess is there anything that’s happening in DC that’s making you optimistic around the future for maybe more engagement in private markets, particularly on the on the retail side?

Kelly Rodriguez, CEO, Forge Global: Yeah. Look, there is. And and and we try to take an active role in those conversations. As a public company, you know, I’ve been exposed for the first time to how important it is to make sure policymakers understand the incredible potential of this asset class. If you think about it right now, we’ve got about $1,718,000,000,000,000 dollars in The US retirement system.

And, much of the assets that are held there are not returning the kind of, long term return which would satisfy, many asset managers’ expectations about what retirement looks like ten or twenty years from now. So what we’ve been trying to do is educate, policymakers on the potential here, and it hasn’t taken long for both sides of the aisle to see this. So there’s a lot of interest in figuring out one, and it’s obviously dependent on, you know, who’s in charge, but how do you balance the opportunity to provide returns to investors in The US for an asset class that they just haven’t been able to participate in? Trying to get into a private equity fund is hard enough. Trying to get into a venture fund or into individual names can be, you know, impossible if you don’t have the right connection.

So the concept of access combined with the protections of safety and soundness and transparency of pricing, I think that serves everybody’s interests. And and we’re seeing significant bipartisan support for promoting access to the private markets. And so we’re we’re optimistic about where that’s going.

Devin Ryan, Head of Financial Technology Research, Citizens: Great. I want to talk about the international strategy a bit. Obviously, you guys have been making moves internationally. You think about some of these huge themes, artificial intelligence, you’re hearing countries talking about wanting to United States now wants to be the leader, but then that drives kind of a chain reaction of other countries saying we need to invest hundreds of billions of dollars, and that money is going to get invested into companies in a lot of cases. And so those companies are going to have to take capital in and then also at some point have capital out.

And so how are you guys positioning yourselves internationally, and and what are some of the the big trends you’re seeing, internationally as well? You know, technology seems like is a is a big one.

Kelly Rodriguez, CEO, Forge Global: Yeah. We we, we looked at the global market five years ago and said, you know, we need to have a technology strategy for an international business. We think the private market is a global phenomenon. The US is probably five years, maybe six years ahead of where Europe is. If you just look at what trades and who’s investing, we wanted to get into Europe early.

So we announced Ford Europe a couple years ago. We’re now starting to see revenue materialize in our 2025 plan. And, really, both The UK and and and and European continent now has a group of people that have been trained by Forge to work there. We built an API connection from our global order book that makes it accessible to European investors to see what’s available for investment in US companies. So a lot of what’s happening right now is you’ve got European interests in US companies.

We’re not seeing as much yet, and there’s a lag effect of US Investors interested in European countries. Obviously, there’s the big European unicorns that everybody knows, you know, the revolutes of the world, the Klarna’s of the world. We believe that building the technology to be able to integrate in both directions and then creating the regulatory frameworks is where we’re gonna be over the next five to seven years. We’ll extend into Asia at some point. But right now, we are we are focused and have a very skilled team now in The UK, and Germany.

So we’re excited about it, but it will continue to be a little bit of a trailing success story. But the speed with which emerging companies are raising capital in Europe is actually exceeding The US market just in terms of the interest of new new names in that in that in those markets.

Devin Ryan, Head of Financial Technology Research, Citizens: Not a financial question near term, but kind of longer term. Obviously, you’ve taken some expense actions to get the business in a better position. Talk about how that has gone and then how you think about the longer term financial profile of the firm, what are you targeting? How do you guys philosophically want to run this business? Hopefully, the revenue environment gets better as well, which we’ll talk about, I’m sure, with earnings.

But, yes, I’d love to just get a sense philosophically how you’re thinking about the financial profile.

Kelly Rodriguez, CEO, Forge Global: So we recognize that the public markets, given both our size being relatively small and the fact that we’ve invested so much capital the last few years, has not given us some of the credit for what we think of as the long term, shareholder benefits that we’re creating in our in our NextGen platform. We’ve sent a message to the market, and if I say anything that you take away today, take this, that we are committed to reaching our cash flow break in 2026. The combination of efficiency gains from the rollout of next gen platform technology in ’25 and beyond as well as our expected improvements in the overall environment gives us confidence in standing up here and saying, you know, we we credibly believe profitability and expansion of our margin will start to take effect in ’twenty five and ’twenty six. So our philosophy is we don’t we don’t and never wanted to run a money burning business, but we also recognized that it was gonna be a pretty big investment to get out in front of the competitive set in our market. Just about everybody else we compete with is a sort of, legacy type broker dealer, and anybody that’s built any technology is doing relatively small volumes compared to us.

But we really wanted something to be scalable. So we took the risk of making those bets in ’23, ’20 ’4, ’20 ’5, but they’re now starting to turn the corner. So we’re really excited about visibility into ’26 and and and and our cost actions that we made at the end of last year are another indication of that. We’ll continue to be aggressive in getting ourselves to profit between ’twenty five and ’twenty six.

Devin Ryan, Head of Financial Technology Research, Citizens: Yes. That’s great. And just to kind of bring it all together, as you think about private markets, we’re obviously very bullish on the secular opportunity over the next handful of years. I mean, the market turns over 20 basis points, I don’t know the exact numbers, but public markets are trading turning over a couple of %. Yes.

One to two times a year. And so it doesn’t feel like there’s that much that needs to change to see private markets in terms of transaction activity double, triple, quadruple. And so I’m curious to kind of just get a sense of kind of your optimism around over the next five years. Like is this market multiples of the current size? Or how do you think about kind of what you’re playing for?

Because to me, it’s a huge one of the most exciting parts of financial services and and fintech, in my opinion, but I’d love to just get your sense to close it out here. Yeah.

Kelly Rodriguez, CEO, Forge Global: So here’s how I’d close this out. There’s no doubt in my mind that more liquidity is coming to this market and particularly to the top end of the market. I think what makes this market really open up is when platforms are available for companies not only to provide secondary liquidity for shareholders, but for products that drive a larger range of participants that can actually also move primary capital onto the balance sheets of these companies. And we’ve been involved in a few of these, and we see the market starting to look at, a private market platform that expands beyond liquidity and into capital raising. And some of these indexes and innovative products will make that go faster.

When that starts to happen, then you’ll see material pieces of cap tables start to be available. If not for liquidity, then for capital to actually flow into these companies. Yep.

Devin Ryan, Head of Financial Technology Research, Citizens: That’s great, Kelly. Well, thank you so much for joining us. Kelly, Rodrigo has forged

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