u/ Dede-el-fuego interprets:
“Private market tech multiples” refer to the valuation multiples (such as price-to-earnings ratio or price-to-sales ratio) of technology companies in the private market, where shares are not publicly traded on a stock exchange.
“Public multiples” refer to the valuation multiples of companies whose shares are publicly traded on a stock exchange.
The statement is suggesting that the valuation multiples in the private market are higher than those in the public market because private market investments are less liquid, meaning it is harder to buy or sell shares quickly. In addition, the velocity of capital (the speed at which money flows into and out of investments) is lower in the private market compared to the public market.
As a result, changes in interest rates have a faster impact on public equity investments compared to private equity investments. When interest rates rise, investors may sell their public equity investments and move their money into fixed income investments (such as bonds) instead. This can happen quickly in the public market, but it may take years for the same shift to occur in the private market.
Tldr; this means that private market tech multiples may appear to be higher because they are slower to respond to changes in interest rates and other market conditions. However, the statement suggests that this trend may be starting to change and that private market multiples may be contracting, or decreasing, as investors become more cautious.