Private market data is software and data that estimate what private companies and private loans are worth, and record the terms of each deal. A private company is one whose shares are not traded on a stock exchange, such as most start-ups. The users are private-equity, venture capital and private credit funds, and the investors in those funds. The software is also called portfolio monitoring or private asset valuation software.
Why is this hard? A listed company's shares have a new price every second on a stock exchange. A start-up's shares have no daily price. Their value is known for certain only when someone buys or sells shares, which may happen once in two years. But a fund must report the value of its holdings to its investors regularly. In India, SEBI requires private-equity, venture capital and private credit funds to value their investments at least once every six months, and many funds do it every quarter. So the fund must estimate what each start-up is worth.
Take, for example, a fund that owns 8% of a software start-up. The start-up sends the fund a quarterly report as a PDF: revenue of ₹40 crore over the last twelve months. The software reads the report and extracts the figures. It then looks up listed software companies of a similar kind on a financial data terminal. Say those companies are valued at about 6 times their revenue. The software suggests a value of 6 × ₹40 crore, or ₹240 crore, for the start-up. The fund's 8% stake would then be worth ₹19.2 crore. Comparing a company with similar listed companies in this way is called the comparable companies method.
The software also reads the legal documents of each investment. It records the terms: how many shares the fund bought, at what price, and what rights came with them. Some of those rights decide who is paid first if the start-up is sold. The record of who owns what share comes from the start-up's cap table.
Some of these products now use AI models to do this reading. A model drafts the figures and the value, and a valuation analyst checks them before they are used. This is the human in the loop pattern. The approved values then go into fund administration software, which calculates each investor's share of the fund.