As 2024 comes to a close, we’re taking time to reflect on the transformative shifts and standout moments across the private equity, startup, and scaleup landscapes. This year has been defined by resilience, innovation, and recalibrations, offering lessons and opportunities for the years to come. Let’s explore some of the most significant highlights that shaped these dynamic markets.
Private Equity: A Year of Strategic Pivoting
In 2024, PE firms navigated an evolving landscape marked by higher interest rates and economic uncertainty. Despite these challenges, the industry displayed adaptability and strategic focus:
- Focus on Operational Value Creation With rising costs of capital, private equity firms placed greater emphasis on operational improvements within portfolio companies. This shift was underscored by Bain & Company’s report highlighting that nearly 75% of PE investors focused on driving value through operational efficiencies rather than relying solely on financial engineering. Talent management played a pivotal role here, with firms investing in leadership development programs, such as the Startup Founders Toolkit to ensure their portfolio companies had the right expertise to execute strategic changes.
- Sector Specialisation Grows Sector-focused funds gained traction, with technology, healthcare, and renewable energy seeing heightened interest. Firms like KKR and Blackstone announced billion-dollar initiatives targeting clean energy investments, aligning with global ESG goals set out in COP16 and COP28. In parallel, marketing strategies were refined to better position these investments to stakeholders and attract co-investors.
- Middle-Market Momentum Middle-market deals remained robust, driven by a surge in activity among privately held businesses seeking succession solutions. PitchBook data revealed that middle-market deal value reached $400 billion in 2024, reflecting growing investor confidence in this segment. Human capital considerations became critical, with a focus on ensuring that management teams were equipped to scale efficiently.
Startups: Resilience Amid Economic Headwinds
The startup ecosystem showcased its hallmark resilience in 2024, adapting to macroeconomic pressures and redefining growth paradigms. Here’s what stood out:
AI continues to dominate; Artificial intelligence startups continued to attract significant VC funding, with generative AI applications leading the way. OpenAI’s announcement of its new enterprise solutions exemplified how startups are transforming industries at scale. Marketing teams leaned heavily into content strategies that demystified AI for consumers and businesses alike, fostering wider adoption.
Alternative funding models rise, in the face of cautious VC activity. Startups increasingly turned to alternative funding models like revenue-based financing and crowdfunding. Platforms such as Seedrs reported a 30% increase in campaigns compared to 2023. These funding approaches emphasised transparent storytelling and branding to resonate with a broader audience of smaller investors.
Focus on profitability: Unlike the previous “growth at all costs” mentality, 2024 saw startups prioritise sustainable scaling and profitability. TechCrunch noted a 20% increase in startups achieving breakeven or profitability compared to the previous year, signaling a shift in investor expectations. HR teams were central to this shift, emphasising lean hiring practices and fostering cultures of accountability and efficiency, as noted by Head of People and Culture, Carly Redwood, in our interview here.
Scaleups: Scaling Sustainably in a Complex Market
Scaleups — the critical growth phase between startup and maturity — faced unique challenges this year but also demonstrated their potential to thrive:
- Global Expansion Strategies Despite geopolitical tensions, scaleups pursued international market entries, leveraging local partnerships to mitigate risks. Companies like Hopin and Gousto expanded their operations into new regions, reflecting bold growth ambitions. HR leaders played a crucial role in navigating cultural differences and ensuring successful integration of new teams.
- Hybrid Work Innovations With hybrid work becoming the norm, scaleups innovated to maintain productivity and employee engagement. A McKinsey survey found that 60% of scaleups implemented advanced collaboration tools and redesigned their workspaces to support hybrid models. Marketing departments also adapted, creating employer branding campaigns that highlighted flexibility and work-life balance as key differentiators.
- Talent Retention Takes Centre Stage Retaining top talent became a strategic priority. Scaleups embraced neuroinclusive practices, flexible benefits, and targeted development programs to compete with larger corporations for the best minds. At The Small Consultancy, we help these businesses develop these strategies for sustainable growth. This focus extended to creating compelling internal communications strategies to build loyalty and alignment with company missions.
Lessons from 2024
As we reflect on the year, one thing remains clear: the private equity, startup, and scaleup markets are as dynamic as ever. Their ability to adapt, innovate, and grow amid uncertainty offers a testament to the resilience of businesses and investors alike.
Looking ahead, these markets will continue to evolve, shaped by macroeconomic trends, technological advancements, and shifting societal values. For those of us at The Small Consultancy, this year’s developments reinforce our commitment to supporting high-growth companies and investors as they navigate the complexities of today’s business environment. Talent attraction, development and retention alongside marketing strategies will remain central to driving long-term success.
Here’s to an even more impactful 2025!
