Flashpoint doubles down on secondary deals with new $100M fund
Flashpoint, the international investment firm known for backing edtech platform Preply, is preparing to raise a new $100 million direct secondary fund, its second vehicle focused exclusively on acquiring stakes from existing shareholders in high-growth technology companies.
The move underscores growing investor appetite for the secondary market as late-stage startups stay private longer, employees seek liquidity, and early backers rebalance portfolios without waiting for an IPO or trade sale.
Who is Flashpoint and why this fund matters
Founded in 2012, Flashpoint has built a multi-strategy platform investing in B2B SaaS, consumer internet, and software-enabled services across Europe, Israel, and emerging tech hubs. The firm has backed more than 60 companies, including Ukrainian-founded language-learning marketplace Preply, employer branding platform Hibob, and several other fast-scaling software businesses.
The new vehicle, commonly referred to in the industry as a direct secondary fund, will focus on buying shares directly from founders, early employees, angel investors, and early-stage funds. Rather than injecting fresh primary capital into company balance sheets, the strategy creates liquidity for existing holders while keeping the startups themselves on their current growth trajectory.
Why secondary funds are booming
Over the past decade, the global venture market has shifted toward larger rounds and longer private-company lifecycles. As a result, the time to exit for many startups has stretched to 8–12 years, leaving early shareholders locked into illiquid positions.
At the same time, the pullback in IPOs and the reset in tech valuations since 2022 have made traditional exit routes less predictable. This has opened the door for specialized investors like Flashpoint who are willing to provide liquidity at a discount to peak valuations but at a premium to current, more conservative marks.
Direct secondary funds typically target:
- Founders seeking partial cash-out without losing control
- Early employees holding illiquid stock options or shares
- Seed and Series A funds nearing the end of their fund life
- Angel investors looking to recycle capital into new deals
For growth-stage startups, structured secondary transactions can help clean up cap tables, align long-term investors, and reduce pressure for premature exits.
Second direct secondary fund: strategy and positioning
With its second dedicated vehicle, Flashpoint is signalling that secondary deals are no longer a niche sideline but a core part of its long-term strategy. While detailed terms have not been publicly disclosed, similar funds in the market typically operate with a 10–12 year life, a standard 2 and 20 style fee structure, and a concentrated portfolio of 10–20 positions.
The firm is expected to focus on:
- Ticket sizes ranging from low single-digit millions up to $15–20 million per transaction
- Growth-stage software companies with proven revenue traction and a clear path to profitability
- Geographic focus on Central and Eastern Europe, the UK, Israel, and select other hubs where Flashpoint already has networks
- Target companies backed by top-tier venture capital firms to mitigate downside risk
By concentrating on direct secondaries rather than traditional fund-of-funds or LP interest purchases, Flashpoint can underwrite company-level fundamentals, negotiate directly with management teams, and structure deals that align with future primary rounds.
Preply as a flagship example
Preply, one of Flashpoint‘s best-known portfolio companies, illustrates why secondary capital is increasingly strategic. The online tutoring marketplace has raised multiple rounds from global investors and expanded aggressively into language-learning markets worldwide.
As companies like Preply mature, early staff and seed investors often hold sizeable paper gains but have limited options to realize them. A dedicated direct secondary fund allows firms like Flashpoint to step in, purchase those stakes, and hold them through later-stage value creation events such as large growth rounds or eventual exits.
Impact on founders, employees, and early investors
The rise of specialized secondary funds is reshaping expectations around liquidity inside private tech companies. For founders, secondary sales can reduce financial pressure, enabling them to stay focused on building rather than rushing toward an exit. For employees, the ability to sell a portion of vested equity can make stock-based compensation more tangible and competitive in the war for talent.
For early-stage funds and angels, the presence of buyers like Flashpoint offers a way to manage portfolio concentration, return capital to their own limited partners, and maintain reputational alignment with later-stage investors.
However, secondary deals also require careful governance. Boards must balance individual liquidity needs with company-level interests, ensure that information rights are respected, and avoid signalling that insiders are losing confidence. Experienced secondary investors typically work closely with management to structure transactions that minimize these risks.
What this signals for the broader VC market
The decision by Flashpoint to target $100 million for its second direct secondary fund reinforces a broader structural shift in venture capital. As the asset class matures, more specialized capital pools are emerging for every stage of a startup’s lifecycle, from seed to growth equity to late-stage secondaries.
With IPO windows still intermittent and strategic buyers more selective, the secondary market is likely to play a central role in providing liquidity and price discovery. If Flashpoint successfully closes this new fund, it will add further depth to that market, particularly for software companies emerging from Europe and other non-US ecosystems.
For founders and early investors in high-growth tech startups, the message is clear: secondary capital is no longer an exception reserved for unicorns. It is fast becoming an integral part of how modern private companies manage ownership, incentives, and long-term growth.