Ondo Finance said on Oct. 6 that it will launch Ondo Private Markets, a platform for blockchain-based notes designed to track the economic performance of privately held companies, beginning with a pre-IPO artificial intelligence company. The first instrument is expected to enter secondary-market trading this week, offering round-the-clock transfers and trading for eligible participants under the product’s terms.
The launch seeks to create a liquid, onchain format for exposure to companies that have not listed shares on public exchanges. Rather than issuing the private company’s actual stock, Ondo will issue tokenized notes whose value is intended to follow the referenced company’s per-share value when a qualifying liquidity event occurs, such as an acquisition or public listing.
Ondo said the structure could let eligible holders enter or exit exposure before an IPO, bypassing the long holding periods and limited transfer options common in private-company markets. The notes are designed to be transferable and potentially usable in decentralized finance applications, according to the company.
The product arrives as tokenization firms increasingly test whether blockchain settlement can make traditionally illiquid financial markets easier to access and trade. Private-company exposure is one of the harder markets to bring onchain because ownership records, shareholder restrictions and company-controlled transfer rules often limit who can hold actual equity.
Notes track value without providing company ownership
Ondo emphasized that its Private Markets tokens do not represent shares in the companies they reference. Holders will not receive ownership rights, voting rights or other shareholder privileges in the underlying business.
Instead, the buyer acquires a contractual instrument tied to a defined economic reference. Its eventual payout would depend on the terms set out in the offering documentation and on the occurrence of a qualifying liquidity event. That distinction places greater weight on the product’s legal structure, including how the reference price is determined and which events trigger settlement.
For participants, the format may offer more flexible trading than direct private equity holdings, but it also creates a different set of risks. A token’s market price could differ from the referenced company’s implied per-share value, particularly when trading activity is thin or when valuations have not been refreshed through a fundraising round, acquisition offer or other market event.
Ondo said purchasers should review the governing legal documentation, which sets the relevant terms, restrictions and risks. The company warned that acquiring the tokens can result in the total loss of the purchase price.
Private companies hold much of the corporate market
Ondo cited Apollo Academy data stating that 87% of U.S. companies generating more than $100 million in annual revenue remain privately held. Many large technology and growth businesses now stay private for longer, leaving their gains and losses largely within the reach of venture funds, private-equity firms, employees and specialized secondary-market buyers.
That market structure has produced demand for alternative ways to gain financial exposure to late-stage private companies. Traditional secondary transactions can be difficult to execute: prospective buyers may need approval from the company, existing shareholders may have rights of first refusal, and shares can carry transfer restrictions. Pricing is also less transparent than in public markets, where stocks trade continuously.
Ondo’s proposed notes would not remove the underlying uncertainty around private-company valuation. They would instead package that exposure into an instrument that can circulate on blockchain networks under Ondo’s eligibility and legal rules. The model gives the market a tradable claim linked to a private company’s performance without requiring the company itself to place its cap table or shareholder registry onchain.
The first referenced company operates in artificial intelligence, Ondo said, without identifying the firm in its announcement. The company plans later offerings tied to businesses in robotics, cybersecurity, biotechnology and infrastructure. Those sectors contain many venture-backed companies whose valuations can change sharply between funding rounds, making the terms used to calculate a note’s settlement value especially relevant.
Existing tokenization infrastructure supports the launch
Ondo said Private Markets will use infrastructure that already supports its tokenized stocks and U.S. Treasury products. The company reported that this infrastructure had $3.7 billion in total value locked and more than 1 million cumulative holders, though those figures refer to its wider platform rather than the new private-markets product.
Tokenized Treasury products have become one of the more established corners of the real-world asset market, largely because government securities have frequent pricing, defined cash flows and mature custody arrangements. Private-company references present a more complex test. Their valuations can depend on negotiated financing terms, preferred-share structures, liquidity preferences and other provisions that may not be visible in a headline valuation.
Ondo’s approach could therefore appeal most to market participants who understand that they are trading a note with defined contractual exposure, rather than a direct stake in a company. The promised 24/7 trading format may improve accessibility and transfer speed, but it does not guarantee deep liquidity or a price that closely follows the underlying reference value.
U.S. persons are excluded under the stated terms
Ondo said the announced tokens have not been registered under the U.S. Securities Act of 1933 or comparable securities or financial-instrument laws in other jurisdictions. The company said they cannot be offered or sold in the United States or to U.S. persons unless an applicable registration or exemption is available.
Buy orders submitted from within the United States are prohibited, Ondo said. The company also described its announcement as neither an offer to sell nor a solicitation to buy tokens.
Those restrictions underscore the regulatory boundary around the product. Although the notes are built for blockchain networks and described as permissionless for eligible users, access remains subject to jurisdictional restrictions and the conditions in Ondo’s legal documentation. The platform’s ability to develop an active secondary market will depend not only on technical transferability, but also on how effectively it applies those participation rules across different markets.
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