Ondo Finance plans to open a new route for eligible non-U.S. market participants to gain onchain exposure to private companies, starting with tokenized notes linked to an unnamed pre-IPO artificial intelligence business.
The product, called Ondo Private Markets, is expected to begin secondary-market trading this week, according to the company. The notes would trade around the clock on secondary venues and are designed to track a selected company’s per-share value if it reaches a qualifying liquidity event, such as an acquisition, public listing, or another transaction defined by the instrument’s terms.
Ondo is positioning the launch around a gap in conventional markets: large private companies can remain outside public equity markets for years, leaving most individuals unable to access their economic performance directly. Yet the structure also places clear limits on what buyers receive. The tokens are not company shares, confer no shareholder or voting rights, and represent obligations of the issuer rather than ownership in the private business.
Notes offer economic exposure rather than company ownership
Ondo said holders would be able to buy, sell, or adjust their positions through transferable tokens that can interact with other onchain applications. Composability refers to the ability for a blockchain-based asset to be used across compatible protocols, potentially including lending, collateral or decentralized trading systems where permitted.
The company described secondary trading as permissionless, meaning eligible users would not need to seek the private company’s approval each time a note changes hands. Access to the product itself remains restricted. Ondo said the notes will be available only to eligible non-U.S. participants in jurisdictions where the offering is permitted.
That distinction limits the claim that the launch gives retail buyers general access to private technology companies. A buyer of an Ondo Private Markets note would hold a tokenized issuer obligation whose payout is tied to a future valuation-related event, rather than an equity stake recorded on the private company’s capitalization table.
The design may make economic exposure easier to transfer than traditional private-market interests, which frequently involve long lockups, transfer restrictions and bilateral negotiations. It also introduces a separate layer of issuer and product-structure risk. The note’s value could diverge from the underlying company’s implied per-share value, particularly where secondary liquidity is thin or participants disagree over the likely terms and timing of a future liquidity event.
Ondo targets companies remaining private for longer
Ondo said that 87% of companies generating more than $100 million in revenue are private, citing the limited menu of retail-accessible options tied to large private businesses in the United States. The company did not identify the AI firm that will anchor the first market or provide a public timetable for disclosing its name.
Private-company exposure has traditionally been concentrated among venture funds, private-equity firms, institutions and wealthy individuals able to meet eligibility thresholds. Tokenization can alter the trading format by putting an instrument on a blockchain, but it does not automatically remove legal restrictions, suitability requirements or the risks associated with hard-to-price assets.
The lack of a named issuer also makes it difficult for prospective participants to assess the first note’s reference company, capitalization structure, financial position, dilution risk or the likelihood of a near-term liquidity event. Those factors can heavily influence the price of instruments linked to pre-IPO businesses.
Ondo said it is considering future markets linked to companies in robotics, cybersecurity, biotechnology and infrastructure. Each sector presents a different valuation challenge: early-stage biotech firms can be shaped by clinical or regulatory outcomes, while infrastructure businesses may depend more heavily on project financing, contracts and interest-rate conditions.
Secondary liquidity will determine practical access
The promise of 24/7 trading addresses one of the most persistent constraints in private markets: assets may be valuable on paper but difficult to sell before an exit event. Yet trading availability and liquid trading are different outcomes.
Prices on secondary venues will depend on the number of active buyers and sellers, market-making activity, the size of transaction spreads and the clarity of the note’s valuation terms. In periods of low activity, a holder may be able to submit an order at any hour without finding a counterparty at a price close to the instrument’s estimated value.
The initial market will therefore offer an early test of whether tokenized private-company instruments can develop dependable secondary liquidity without the continuous disclosures, standardized reporting and established market infrastructure associated with public equities. Around-the-clock settlement can reduce operational friction, but it does not resolve uncertainty around a private company’s valuation.
Participants would also need to distinguish the token’s market price from any reference price associated with the underlying business. A token may trade at a discount when buyers demand compensation for the absence of shareholder rights, the uncertainty of a liquidity event, or the creditworthiness of the issuing entity. It could also trade at a premium if demand for access outstrips available supply.
Launch extends Ondo’s tokenization strategy
Ondo Private Markets expands a tokenization strategy that has included tokenized Treasurys and publicly listed securities. In July, Ondo announced a partnership with Japan’s SBI Holdings focused on tokenizing Japanese equities through Ondo Global Markets.
Under that arrangement, SBI said it planned to distribute Ondo products through its network and use its JPYSC stablecoin for settlement and collateral. The partnership connected Ondo’s infrastructure to one of Japan’s major financial groups, though private-company notes would represent a more complex product than tokenized exposure to securities that already trade in established public markets.
Ondo said its tokenized stocks and Treasury platforms have combined total value locked of $3.7 billion and more than 1 million cumulative holders. Total value locked is a measure commonly used in onchain finance to estimate assets deposited in a protocol or associated smart contracts; it is not equivalent to daily trading volume or an assessment of secondary-market liquidity.
The company’s move also arrives as tokenized assets attract growing attention across financial markets. The figures cited in the report put tokenized equities at more than $42 billion in market capitalization, or roughly 35% of a $121 billion tokenized-asset market. Those estimates place equity-linked products among the larger segments of the tokenized real-world asset sector, although market totals can differ depending on whether data providers include stablecoins, government debt, funds or other instruments.
Ondo’s first private-market note will show whether tokenization can turn limited private-company exposure into a functional secondary market while preserving the legal and structural restrictions that surround private securities. Its immediate appeal will depend less on the availability of 24/7 trading than on whether eligible participants can price, enter and exit the instrument with sufficient transparency and depth.
Curious about tokenized private markets? Explore how tokenized equities work and their role in on-chain real-world assets.
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