Forge Global Holdings, Inc. (FRGE): 5 FORCES Analysis [Nov-2025 Updated]

You're trying to get a clear picture of Forge Global Holdings, Inc. (FRGE) in the wild west of the private market as of late 2025, and honestly, the competitive landscape is a real mixed bag. We see intense rivalry-evidenced by that \$14.3 million Adjusted EBITDA loss in H1 2025-clashing with high customer power, which is already squeezing their net take rate down to 2.3% in Q1 2025. Still, the company benefits from massive regulatory hurdles that keep new entrants out, even as substitutes like tokenization platforms start nibbling at the edges. To make a smart call on Forge Global Holdings, Inc. (FRGE), you need to see how these five forces stack up right now; check out the full, unvarnished breakdown below.

Forge Global Holdings, Inc. (FRGE) - Porter's Five Forces: Bargaining power of suppliers

You're analyzing Forge Global Holdings, Inc.'s supplier landscape as of late 2025. The power these suppliers hold directly impacts your margins and operational flexibility. Here is a breakdown of that dynamic.

Low power from technology vendors due to Forge's proprietary ATS and data platform.

Forge Global Holdings, Inc. relies on its self-developed infrastructure, which inherently limits the leverage of off-the-shelf technology providers. The success-based fee model means technology costs are largely absorbed internally until a transaction closes. For direct secondary transactions, Forge Global Holdings, Inc.'s transaction fee is typically between 2-4%. This structure means the cost of the platform itself, which is the core value proposition, is not directly dictated by external software vendors in a way that immediately pressures transaction pricing.

High power from key private companies, as their approval is often required for secondary sales.

The companies whose shares are being traded-the issuers-hold significant power. This is because many private companies impose transfer restrictions or require board approval before shares can be transferred, and most maintain rights of first refusal. This necessity for issuer consent creates a bottleneck that suppliers (the private companies) can exploit. As of March 31, 2025, Forge Global Holdings, Inc. had 546 total companies with Indications of Interest (IOIs), meaning the company must maintain good standing and compliance with a large base of these potential 'suppliers' of liquidity.

Data suppliers' power is mitigated by Forge's 13 years of proprietary trading data and indices.

Forge Global Holdings, Inc. counters the power of external data providers with its own deep, proprietary asset base. The firm touts 18 years of combined operational expertise and proprietary trading data. Furthermore, its derived pricing dataset, Forge Price™, calculates an indicative price per share for approximately 250 pre-IPO venture-backed late-stage companies on a daily basis. This proprietary data acts as a substitute for, or a powerful complement to, third-party market data feeds, reducing dependency.

Core suppliers (e.g., cloud services) are commoditized, limiting their leverage.

For general operational needs, like cloud computing or other standardized services, the market is competitive, keeping supplier power in check. While specific cloud service costs are not itemized, general operating expense trends suggest some control. For instance, in the second quarter of 2025, Other cash Operating Expenses (OpEx), excluding CFO transition costs, declined by $1.1 million quarter-over-quarter, driven largely by lower professional services expenses. This indicates that Forge Global Holdings, Inc. is actively managing and potentially reducing costs in these commoditized areas.

Here's a quick look at key figures illustrating the supplier-dependent and supplier-mitigating factors:

The reliance on issuer approval for share transfers remains the most acute point of supplier power you need to manage. Finance: draft a sensitivity analysis on transaction success rates if a top-tier issuer restricts transfers by end of Q4 2025.

Forge Global Holdings, Inc. (FRGE) - Porter's Five Forces: Bargaining power of customers

You're looking at the customer side of the equation for Forge Global Holdings, Inc. (FRGE) as of late 2025, and it's a mixed bag. The power dynamic really splits based on the size of the transaction you're dealing with. For the biggest players, the institutional investors and those moving large blocks of shares, their bargaining power is definitely high. This is cemented by Forge Global Holdings' stated standard minimum for direct transactions being $100,000 USD. When these large entities transact, they command more leverage, which we saw reflected in the market dynamics of early 2025.

Here's the quick math on that leverage: the trading volume in Q1 2025 hit $692.4 million, and the company explicitly noted that the lower net take rate in that quarter was attributable to the mix of clients and several large block trades. That pricing pressure is real; the net take rate dipped to 2.3% in Q1 2025. To be fair, the rate ticked up slightly to 2.4% in Q2 2025, but the initial drop signals that large customers can push on fees.

It's important to map out the scale of these transactions to see where the pressure points are. The difference between Q1 and Q2 2025 shows the platform's growth, but also how sensitive the revenue capture is to the deal mix. If onboarding takes 14+ days, churn risk rises, but here we see the revenue capture itself is variable.

Still, customers aren't entirely free to walk away. For the other side of the market-the private company shareholders looking for liquidity-their power is more constrained. While Forge Global Holdings, Inc. has 164 institutional owners, the general public, who are often the sellers needing liquidity, hold a 45% stake in the company itself. This suggests a large base of potential sellers who might be more motivated to transact, even if the fees aren't optimal. Also, while the standard minimum is $100,000, Forge offers indications of interest as low as $5,000 via a Forge Fund, which provides a necessary, albeit limited, outlet for smaller sellers.

The competitive landscape also limits customer power. Customers definitely have alternatives; they can pursue direct secondary transactions outside the platform or use competitor platforms. However, the market event of late 2025-Charles Schwab agreeing to acquire Forge Global Holdings, Inc. for roughly $660 million on November 6, 2025- fundamentally changes this dynamic. This acquisition suggests that the platform's value proposition, despite fee pressure, was strong enough to attract a major buyer, which could either increase future customer options or, under new ownership, consolidate power.

Finance: draft a sensitivity analysis on the impact of a 2.0% net take rate on the Q2 2025 Marketplace Revenue of $18.5 million by Monday.

Forge Global Holdings, Inc. (FRGE) - Porter's Five Forces: Competitive rivalry

The competitive rivalry within the private securities marketplace remains high, directly impacting Forge Global Holdings, Inc.'s operational results. You see this pressure reflected in the financials. For the first half of 2025 (H1 2025), Forge Global reported an Adjusted EBITDA loss of $14.3 million, against total revenues less transaction-based expenses of $52.7 million.

Direct competition from established Alternative Trading Systems (ATS) platforms like Nasdaq Private Market and StartEngine Secondary is a major factor. Nasdaq Private Market (NPM) facilitated over $6 billion in transaction value across its company-structured liquidity programs in 2024, and its private share market returned 3% in 2024. StartEngine reported year-to-date revenue of $92 million for 2025, supported by a community of over 2.1 million individuals and $1.5 billion invested on its platform.

Competition is also significant from other secondary marketplace platforms, such as EquityZen. EquityZen reported that its deal volume almost doubled from the first half of 2024 to the first half of 2025. In Q2 2025, the average discount for deals on that platform decreased to 13% from 28% in Q1 2025, suggesting shifting valuation dynamics that Forge Global must navigate.

The intensity of this rivalry contributes to consolidation risk, which materialized in late 2025. Forge Global confirmed in October 2025 that it was engaged in discussions regarding a potential sale with multiple parties, following unsolicited inbound indications of interest. This followed a significant drop in market valuation, with the market capitalization falling to approximately $250 million as of October 2025, down from an approximate $2 billion valuation at its 2021 SPAC merger. Ultimately, Charles Schwab acquired Forge Global in a $660 Million Deal on November 6, 2025.

Competition in this opaque market hinges on proprietary data assets and network effects. Forge Global ranks 1st amongst 26 active competitors, having raised a total of $250 million in funding across 6 rounds. As of December 31, 2024, the company employed 300 individuals.

Key comparative metrics in this competitive environment include:

The competitive landscape is further defined by the following factors impacting market share:

• - Trading volume reached $1.4 billion in H1 2025.
• - EquityZen Q2 2025 average discount was 13%.
• - Forge Global insider ownership stood at 50.22%.
• - Forge Global H1 2025 Net Loss was $28.6 million.
• - StartEngine hosted 75 Regulation A offerings as of March 31, 2025.

Forge Global Holdings, Inc. (FRGE) - Porter's Five Forces: Threat of substitutes

You're looking at the competitive landscape for Forge Global Holdings, Inc. (FRGE), and the threat of substitutes-other ways for private market participants to get liquidity or for companies to stay private-is definitely a key area to watch. Honestly, the landscape is shifting fast.

High threat from internal company liquidity programs and tender offers.

Forge Global Holdings, Inc. itself provides infrastructure for tender offers, which are a direct substitute for a secondary market transaction. A tender offer is a formal invitation to shareholders to sell shares back to the issuer or a third party at a specified price within a set time frame. These offers typically run for a set period, generally requiring at least 20 business days. The company leadership maintains full control over who buys shares, the price, and the volume, which can be a substitute for a broad secondary market for some shareholders.

The sheer amount of capital available privately also keeps companies from needing public markets or external secondary platforms. Financial sponsors, for instance, held about $2.6T in uncommitted capital as of mid-2025.

Here's a quick comparison of the liquidity mechanisms:

Threat from Initial Public Offerings (IPOs) is low; companies stay private longer (14 years median age).

The trend of companies staying private longer directly reduces the pool of potential public market transactions that Forge Global Holdings, Inc. might otherwise facilitate through its secondary market infrastructure. The median age of a company at the time of IPO now stands at 14 years. This is significantly up from the median age of 6 years in the 1980s. This extended private tenure means more years where liquidity needs must be met outside of a public offering, but it also means that when an IPO does happen, the company is more mature.

The shift is stark when you look at the historical context:

• Median age at IPO (1980s): 6 years
• Median age at IPO (1999): 5 years
• Median age at IPO (2024): 13.5 years
• Median age at IPO (2025 data point): 14 years

The revenue for companies going public has also increased, nearly doubling over the past two decades from $110 million in 2005 to $218 million.

Emerging threat from tokenized platforms like Jarsy offering fractional shares for as little as $10.

New technology platforms are directly challenging the traditional model of accessing private equity. Tokenized platforms, such as Jarsy, are an emerging substitute by democratizing access to these assets. Jarsy, for example, allows investors to buy fractional shares of premier private companies with minimums as low as $10. This platform, which raised $5 million in pre-seed funding, uses a 1:1 asset-backed token model, removing technical barriers for new investors while offering blockchain transparency. This low barrier to entry directly competes with platforms that might require higher minimums for similar secondary market access.

Alternative financing platforms like Secfi substitute the need to sell shares for option exercise.

For employees holding stock options, financing solutions offer a substitute for selling shares to cover exercise costs or for immediate cash needs. Secfi provides equity planning and financing services, helping over 40,000 startup employees manage equity worth nearly $45 billion in value to date. Secfi's financing model substitutes a full sale by offering cash while the user retains ownership, charging a 5% platform fee plus an Advance Rate and Equity Share on the exit value. This directly substitutes the need for a shareholder to sell their entire stake on a secondary market just to fund an option exercise or meet a tax bill.

Here are the key financial aspects of this substitute:

• Secfi employees helped: Over 40,000
• Total value of equity planned: Nearly $45 billion
• Secfi financing fee structure: 5% platform fee + Advance Rate + Equity Share
• Secfi total funding raised: $7 million across 4 rounds, with a latest debt round of $150 million in May 2021

Forge Global Holdings, Inc. (FRGE) - Porter's Five Forces: Threat of new entrants

You're looking at the barriers to entry for a new player trying to replicate what Forge Global Holdings, Inc. does in the private capital markets. Honestly, the threat from new entrants is decidedly low, primarily because the regulatory moat around this business is incredibly deep and expensive to cross.

The first major hurdle is regulatory compliance. Any new entity aiming to operate a marketplace for unregistered securities must secure registration as a broker-dealer and operate an Alternative Trading System (ATS) under the watchful eye of the Financial Industry Regulatory Authority (FINRA). This isn't a simple online filing; it requires substantial ongoing financial commitment. For instance, as of 2025, FINRA member firms with gross revenue exceeding $50 million up to $100 million face a Gross Income Assessment rate of 0.0738%. If a new entrant scales quickly, they immediately face these recurring regulatory overheads designed to cover FINRA's supervision and examination costs. Plus, every registered person incurs a Personnel Assessment fee, which is a direct, recurring cost of doing business.

Next, consider the capital investment needed just to build a compliant, scalable trading and custody technology stack. Forge Global Holdings, Inc. reported total Assets Under Custody of $17.6 billion as of March 31, 2025. Building the infrastructure to securely handle that volume, manage settlement, and provide data services requires millions in upfront and ongoing technology expenditure. The market itself values this established infrastructure highly; Charles Schwab agreed to acquire Forge Global Holdings, Inc. for $45 per share in cash, valuing the entire firm at $660 million. That valuation reflects the cost of the existing, proven technology and compliance framework, which a startup must match or exceed.

The established network effects act as a significant barrier, too. Network effects mean the platform becomes more valuable as more participants join. Forge Global Holdings, Inc. has a history of transactions that new entrants lack. In the first quarter of 2025, Forge reported a total trading volume of $692.4 million. This volume is a direct result of their established network of buyers and sellers. A new platform starts at zero liquidity, which is a massive disadvantage when dealing with illiquid private shares.

Finally, trust is the currency of private markets, and Forge Global Holdings, Inc. has spent years building it. New entrants face difficulty attracting the necessary volume of buyers and sellers without a proven track record of regulatory adherence and successful trade execution. The fact that Forge Global Holdings, Inc. was deemed an attractive acquisition target by a major financial institution like Charles Schwab, with a market capitalization around $609.83 million as of November 2025, signals a high level of validated trust and operational maturity that takes years to replicate.

Here's a quick look at the scale Forge Global Holdings, Inc. operates at, which sets the bar for any potential competitor:

The barriers to entry are structural, not just competitive. You're not just fighting another startup; you're fighting the regulatory framework and the established trust capital.

The key deterrents for new entrants include:

• Extremely high regulatory barriers, requiring FINRA broker-dealer and ATS registration.
• High capital investment required for building a scalable, compliant trading and custody technology stack.
• Significant barrier from established network effects and Forge Global Holdings, Inc.'s extensive private company data history.
• New entrants face difficulty building trust and attracting the necessary volume of buyers and sellers.

If onboarding takes 14+ days for a new platform to clear regulatory hurdles, churn risk rises for early adopters.

Finance: draft 13-week cash view by Friday.