MoneySeptember 9, 2026via Financial Times Technology
DeepSeek fundraising frenzy spawns costly shadow market
Why it matters
As late-stage AI startups raise at dizzying valuations, secondary markets are emerging to meet investor demand for liquidity. But the terms—long lock-ups, high fees—suggest a speculative froth that could unwind badly if growth doesn't match valuation expectations.
Key signals
- DeepSeek fundraising round triggering secondary market activity
- Secondary investment vehicles featuring five-year lock-up periods
- Escalating fees on secondary investments
- Suggests liquidity mismatch between private valuations and exit timing
- Pattern repeating across late-stage AI startups
The hook
DeepSeek's fundraising frenzy is spawning a shadow market of secondary vehicles with 5-year lock-ups and escalating fees—a cautionary tale about AI startup valuations running ahead of liquidity.
New investment round triggers rush of vehicles with escalating fees and five-year lock-ups