Tokenization’s Tipping Point: Can Retail Investors Shape the Future of Private Markets?

For decades, private market investments — from high-growth startups to mid-size champions — have been reserved for institutions, funds, and ultra-wealthy individuals. Discover how regulators, liquidity challenges, and new infrastructure are opening opportunities for retail investors — and why this matters now.

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Introduction

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Here's a striking contradiction at the heart of European innovation finance: Europe is projected to reach a Total Capital Raised of overUS$20 bn in the Venture Capital market by 2025 (Statista, 2025), yet retail investors across the EU remain systematically excluded from backing the next generation of European scale-ups. Meanwhile, these same investors can freely speculate on volatile crypto currencies and meme tokens without regulatory intervention.

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This exclusion is particularly damaging in Europe's venture ecosystem. Compared to other jurisdictions, Europe's VC sector consists of fewer and smaller funds, because institutional investors in the EU rarely invest in VC or prefer established funds in the US. The average EU venture capital fund size is approximately €60 million, whereas a similar US fund has more than double that amount.

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This means European retail investors typically gain exposure to companies like Revolut, Klarna, Spotify, or other European unicorns only after IPO—when much of the exponential value creation has already been captured by institutional investors and ultra-wealthy individuals.

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Europe’s legal framework already permits retail participation under the EU Prospectus Regulation (EUR-Lex, 2025), albeit subject to thresholds and disclosure requirements and often to reluctance in the promotion of such assets by some EU member states’ regulators.

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The true barrier isn’t regulation—it’s the complexity of finding, transacting, and holding these assets. Tokenization can bridge this gap.

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Key Takeaways

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• Private markets are massive and growing: valued at $13 trillion globally, with retail largely excluded (Bain & Company, 2025). In 2025, retail demand is accelerating — 97% of asset managers report growing interest in private equity and real estate (Apex Group, 2025).

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• Tokenization can bridge the gap, potentially making private assets easier to source and invest in without the intervention of an intermediary (typically a bank),easier to settle and self-custody compatible.

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• Regulatory access already exists via the EU Prospectus Regulation — the challenge is infrastructure and UX, not new law (EUR-Lex, 2025).

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• Liquidity is the challenge: tokenization enables ownership, but secondary markets and private credit inflows show the urgency of liquidity solutions (FinancialTimes, 2025).

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• ‍Yooro’s role: delivering seamless regulatory, technological and operational infrastructure to simplify security token issuance and distribution in selected geographies for fundraisers, and access to private deals for investors and their wealth managers.

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Retail Demand is Exploding in 2025

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According to Apex Group research, 97% of asset managers report strong or moderate retail interest in private markets.

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Demand is highest for private equity (67%) and real estate (55%), with 86% predicting alternative investments will dominate retail portfolios within five years .

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(Apex Group, 2025)

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In private credit, affluent US investors have already injected a record $48 billion in H1 2025, already surpassing the total inflows recorded last year. In Europe, private credit assets have doubled to €24 billion year-over-year (Financial Times, 2025).

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This signals a clear appetite — the infrastructure must catch up.

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The Access Gap

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Global public markets exceed $110 trillion in value, while private markets are now worth more than $13 trillion and growing rapidly (Bain &Company, 2025). Yet ownership of these assets remains out of reach for most retail investors.

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European venture capital is rebounding in 2025 as AI, fintech and green technology valuations lead recovery trends, yet retail participation remains fragmented across national regulatory frameworks. In 2025, the UK continued to attract the largest share of European venture capital investments, exceeding €20 billion, but individual investors still had virtually no direct access to these opportunities (Statista, 2025).

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This means individuals typically gain exposure to companies likeOpenAI, Revolut, Lovable or other scale-ups only after IPO — when much of the value creation has already been captured.

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At Yooro, our vision for investors is simple: remove unnecessary friction by providing one-click, tokenized and bankable securities, enabling direct participation without the high legal costs and fragmented vendor landscape that traditionally characterizes private markets.

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Why European Retail Venture Access Matters: The Innovation Imperative

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Europe's Innovation Funding Gap

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Reforms could increase investment in high-tech startups that power innovation, and retail participation represents a massive untapped capital source. Conservative estimates suggest European retail venture access could:

•              Unlock €10-20 billion in additional venture capital over the next five years

•              Create early-stage investment opportunities for over50 million European households

•              Enable European startups to achieve US-level funding rounds through expanded investor bases

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The Demographic Innovation Opportunity

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Europe's educated, tech-savvy population represents ideal venture capital participants:

•              High disposable income among tech workers who understand startup business models

•              Growing fintech adoption creating comfort with digital investment platforms

•              Strong preference for European companies and innovation, creating natural venture investment demand

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Strategic European Independence

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Retail venture access could reduce European dependence on US venture capital. American investors account for nearly a third of the total amount invested in European VC. Domestic retail participation could keep moreEuropean innovation value within European markets.

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Tokenization: From Hype to Infrastructure

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Tokenization is no longer a buzzword. By structuring securities as programmable digital tokens, companies and funds can offer to professional investors, and in some instances retail investors, compliant, custody-friendly instruments that comply with EU, UK, Swiss and UAE regulatory frameworks.

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Earlier this year, Yooro partnered with Tokeny to enable just that: a seamless path for issuers to launch tokenized securities compliant with the EU Prospectus Regulation, compatible with self-custody as well as with bank custody, and cross-border investment flows.

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Unlike cryptocurrency tokens, tokenized securities embed accountability: investors purchase a product subject to financial regulations and related investors protections.

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Existing Regulations Mean Retail Access is TechnicallyPossible

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The EU Prospectus Regulation already enables distribution of securities to retail investors within specific thresholds and exemptions.Together with the EU DLT Pilot Regime, these frameworks create a foundation for testing and scaling new forms of tokenized securities. What has been missing is infrastructure to simplify and scale this participation — and tokenization provides it.

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The real gap lies in the investor experience: tokenization shrinks minimum thresholds, automates disclosures, and embeds custody — enabling platforms to deliver compliant, accessible private market offers (InvestEurope, 2025).

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Liquidity: The Missing Link

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Even with compliant tokenization, one stubborn challenge remains:liquidity. Academic research shows that while tokenization enables ownership, secondary trading volumes are still fragmented and often too low to support true accessibility (Yermack, 2025).

Liquidity is the lifeblood of markets. Without it, tokenized assets risk becoming “trapped value” rather than empowering retail investors.

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Private credit is booming: a record $48 billion flowed into funds in just the first half of 2025 — already surpassing last year’s full-year total— and European inflows have doubled to €24 billion year-over-year. This demonstrates both demand and expectations for liquidity — exactly the kind of environment tokenization infrastructure can serve (Financial Times, 2025).

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This is where infrastructure providers, custodians, distributors and new players such as digital exchanges that are springing up thanks to the introduction of the EU DLT Pilot Regime must work together to:

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·       Establish robust secondary market venues.

·       Ensure investors can exit positions without friction.

·       Standardize interoperability between platforms.

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Why This Matters

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Retail investors should not be locked out of opportunities simply because they are unconventional when compared to public market investments. The irony is stark: regulators allow speculative meme-tokens, but restrict access to diversified, regulated private markets funds or direct investments.

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The better approach? Disclosure, diversification requirements, and clear risk education. Give investors the tools and knowledge to decide what’s“too risky” for themselves — instead of blanket exclusions.

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Conclusion

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Tokenization has reached its tipping point. No longer a futuristic promise, it is a live infrastructure play changing how private markets work and how accessible are such investments to investors.

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The question isn’t if retail investors will gain access, but how.

‍Should regulators guide them with structured frameworks — or grant them the freedom to choose?

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At Yooro, we believe in access with accountability. Explore how our Solutions can help issuers and investors alike bridge the gap between private markets and the long-term opportunities they deserve.

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References

·      Apex Group. (2025, January). Eighty-six percent ofprivate equity firms expect alternative investments to dominate retailportfolios in the next five years. ApexGroup. https://www.apexgroup.com/insights/eighty-six-percent-of-private-equity-firms-expect-alternative-investments-to-dominate-retail-portfolios-in-the-next-five-years-says-apex-group/

·       Bain& Company. (2025). Global Private Equity Report 2025. Bain & Company. https://www.bain.com/insights/global-private-equity-report-2025

·       Bank for International Settlements. (2023, February). Crypto shocks and retail losses. BIS Bulletin No. 69. https://www.bis.org/publ/bisbull69.pdf

·       EuropeanCommission. (2025, October). Breaking down barriers to market integration.European Commission.

·       EuropeanCommission. (2025). Venture capital policy areas. European Commission.

·       EUR-Lex.(2025). European venture capital funds regulation. EUR-Lex.

·      Financial Times. (2025, July). Affluent investors drive $48 billion into private credit funds in H1 2025. Financial Times. https://www.ft.com/content/0b3cd961-f748-4c0b-8298-e9329820e244

·       InvestEurope. (2025). Celebrating European Venture Capital 2025. Invest Europe.

·       InvestEurope. (2025). EuVECA regulation overview. Invest Europe.

·       JacquesDelors Centre. (2025). Europe ventures forward: Getting the scale up of clean tech. Jacques Delors Centre.

·       MordorIntelligence. (2025). Europe Venture Capital Market Size. Mordor Intelligence.

·       PitchBook.(2025, November). Market conditions continue to fuel European VC valuations recovery. PitchBook.

·       Statista.(2025). Europe venture capital investments by country 2025. Statista.

·       Statista.(2025). Venture Capital - Europe Market Forecast. Statista.

·       Tokeny.(2025, February). Yooro and Tokeny Partner to Simplify Private MarketInvestments via Tokenization. Tokeny. https://tokeny.com/yooro-and-tokeny-partner-to-simplify-private-market-investments

·       InternationalMonetary Fund. (2025, July). Europe can better support venture capital to boost growth and productivity. IMF.

·       InternationalMonetary Fund. (2025). Stepping up venture capital to finance innovation inEurope. IMF.

·       Yermack,D. (2025). Tokenization and Liquidity in Private Markets. arXiv preprint. https://arxiv.org/abs/2508.11651

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About Yooro

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Yooro is the operating system for private capital markets: a full-stack platform to raise, manage, and deploy capital across private markets – built to remove reg, tech and ops complexity. Our mission is to empower the transformation of private capital markets by delivering seamless, compliant, and intelligent infrastructure that removes friction, unlocks access, and fuels long-term value creation. 

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