VC-backed private company valuations now represent 10% of the total market cap of public equities. This figure was closer to 0% a decade ago.

SIFMA estimates the total market cap of publicly listed equities at $127T. Caplight values total VC-backed private company valuations at approximately $11T.

This slice of total equity value is growing and represents some of the most innovative companies in the world.

Which raises the question: are thematic ETFs still giving investors exposure to pockets of market growth, as intended?

Nothing helps make a point like the AI trade.

To quantify this, we created two equal-weighted indexes: one tracking the top 10 public AI companies by market cap, and another tracking the top 10 private AI companies by valuation.

The result: private AI companies outperformed their public peers by 5x in 2025.

The reason: most AI-native companies remain private, and they’re growing fast without the drag of slow-moving legacy business lines like those at public companies.

We expect this to continue. In 2025, 108 companies traded in the secondary market for the first time. The majority of these newcomers are application-layer AI companies coming for S&P 500 incumbents. But retail investors have limited access.

So, who is building the first pure-play AI ETF? Why can’t this product exist? Who’s going to lecture me about the lack of liquidity to support creation/redemption?

Disclaimer: This communication is for informational purposes only and does not constitute an offer or solicitation to buy or sell any securities or investment products. Past performance is not indicative of future returns. All investments carry risk, and you may lose some or all of your investment. Consult with your financial advisor or an investment professional before making any investment decisions.

External sources:

SIMFA: https://www.sifma.org/wp-content/uploads/2024/07/2025-SIFMA-Capital-Markets-Factbook.pdf

Public equities: https://finance.yahoo.com/