The Rise of Private Tech Titans: How Citigroup's Research Expansion is Redefining Market Access

The financial landscape is undergoing a seismic shift. Over the past decade, the number of public companies has declined, while private firms—particularly in artificial intelligence (AI), aerospace, and cloud computing—have emerged as dominant forces. This transition has created a gap in market transparency, as traditional public market research tools struggle to keep pace with the opaque nature of private company operations. However, Citigroup's strategic expansion into private company research is bridging this divide, offering investors a new lens to analyze high-impact innovation and reshaping the rules of engagement in global markets.

The Structural Shift: From Public to Private Dominance

The decline of public company listings has accelerated since 2020, with only 180 U.S. IPOs in 2023 compared to 400 in 2019. Meanwhile, private tech firms are securing record funding rounds, delaying IPOs, and leveraging mergers and acquisitions (M&A) to scale. For example, Anthropic raised $3.5 billion in a 2024 Series E round, valuing the AI developer at $61.5 billion, while Wiz, a cloud security SaaS firm, was acquired by Alphabet for $32 billion after achieving a $12 billion valuation. These examples underscore a trend: private companies are no longer just startups—they are market-shaping powerhouses.

Citigroup's research division has recognized this shift and is now systematically analyzing approximately 100 large private firms, primarily in tech. Unlike public company research, which relies on quarterly earnings reports, Citigroup's approach involves fundamental analysis of private firms' operations, including direct engagement with customers, vendors, and partners. This method mirrors how the bank covers public companies, ensuring that investors can track the same metrics—product launches, customer acquisition, and R&D spend—across both public and private sectors.

Citigroup's Playbook: Enhancing Transparency in the Private Sector

Citigroup's strategy is twofold: first, to democratize access to private company data for institutional and retail investors, and second, to identify which private firms are poised to disrupt traditional profit pools. Heath Terry, the bank's global head of technology research, has spearheaded coverage of the heavily private AI sector, a space dominated by firms like Anthropic, Cohere, and Perplexity AI. By publishing research on these companies' strategic moves—such as new product launches or major client contracts—Citigroup is creating a roadmap for investors to assess their market potential.

The bank's efforts also include direct engagement with private company management teams. While these firms are not obligated to disclose financial data, many recognize the value of visibility during fundraising. For instance, Stripe's decision to delay its IPO in 2025 was partly influenced by investor feedback, which Citigroup's research helped contextualize. This dynamic creates a feedback loop: private companies gain credibility and access to capital, while investors gain insights into their growth trajectories.

The Investor Case: Why Early Engagement Matters

For investors, the implications are clear. The private sector is now the engine of innovation, and those who ignore it risk missing out on the next Microsoft or Amazon. Citigroup's research provides a framework to evaluate private firms using traditional public market metrics, such as revenue growth, customer retention, and EBITDA margins. For example, Databricks—a data analytics platform valued at $38 billion—has shown EBITDA-like margins of 25% despite remaining private, outperforming many public SaaS peers in profitability.

Moreover, Citigroup's analysis of capital flows into private markets reveals a growing appetite for alternative investments. According to the bank's Rebooting the Global Asset Management Industry report, 67% of asset managers expect the democratization of private markets to drive organic growth over the next three years. This trend is supported by a 78.8% increase in Series D funding in 2024, as startups extend their private lifespans to optimize valuations.

Strategic Recommendations for Investors

1. Leverage Citigroup's Research for Early Signals: Use the bank's private company analyses to identify firms with strong product-market fit and defensible moats. For instance, aerospace startups like Relativity Space and Aireon are being tracked for their potential to disrupt traditional satellite and launch industries.
2. Diversify Across Public-Private Exposure: While public tech stocks like NVIDIA and Microsoft remain critical, pairing them with private investments in AI infrastructure or quantum computing firms could hedge against market volatility.
3. Monitor M&A Activity in AI and SaaS: Citigroup's data shows a 33% year-over-year increase in AI-related M&A deals. Firms like Palantir and Snowflake are likely acquirers of high-potential private targets, offering investors indirect exposure.

The Road Ahead

Citigroup's expansion into private company research is more than a tactical move—it's a response to a fundamental reordering of the global economy. As private firms continue to outpace public companies in innovation and valuation, the ability to analyze these entities will become a key differentiator for investors. By treating private companies with the same rigor as public ones, Citigroup is not only enhancing market transparency but also empowering investors to participate in the next wave of technological disruption.

The question for investors is no longer whether to engage with private tech firms, but how to do so effectively. With the right tools—and Citigroup's research as a guide—the private sector's influence on global markets will no longer be a blind spot, but a goldmine of opportunity.