PitchBook News - What we expect in 2024

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December 23, 2023

Controlled-environment agriculture: Continuing our series on Emerging Sustainable Investment Opportunities, our new research dives into the potential across indoor farming, vertical farming, and more. Read it here.

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Sr. Analyst, Private Credit
Reporter, Private Equity

What does 2024 hold for emerging tech?

Two mega-trends stand out in our 2024 emerging tech outlooks—the continued rise of AI and increasing M&A.

Our analysts pinpoint where AI is likely to have the greatest impact, as we expect significant advancements in automating labor-intensive activities such as farm work and driving in 2024 and 2025.

We also expect AI to further automate enterprise software applications by minimizing the need for human labor. These shifts should accelerate or sustain as AI models improve on the back of immense VC investment.

The second major trend we expect in 2024 is an increase in M&A in fintech, insurtech, identity and access management, and more.

The prospects of declining interest rates are boosting equity valuations and improving LBO math, both of which make M&A more likely. Additionally, decreasing odds of a recession are likely to push more large corporates to accelerate acquisitions in fintech, insurtech, cybersecurity, and SaaS.

Other key trends in our 2024 outlooks include greater institutional adoption and control of crypto assets, AI-driven improvements in personalized nutrition, greater penetration of drone deliveries, the shift to low/no carbon energy, increasing demand for carbon credits, and more adoption of composable e-commerce services.

Read all of our tech outlooks here:

Consumer Tech Outlook

Industrial Tech Outlook

Enterprise Tech Outlook

Thanks,

James Ulan
Lead Analyst, Emerging Technology
X (formerly Twitter) | LinkedIn

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The road ahead for LPs and their private market allocations

Inflation is falling, public markets are near highs, and the economy is chugging along; US investors have plenty to celebrate this holiday season.

In stark contrast to sentiment at the start of the year, expectations of a soft landing for the US economy have risen considerably, providing encouraging signs for 2024's outlook. Still, a relatively higher rate environment appears to be here to stay, and private market allocations are under considerable scrutiny as investors weigh private assets' prospects going forward.

The slow exit environment has crimped cash flows from buyout and venture funds even while valuations remain elevated. Commercial real estate appears to be in the midst of a sharp correction. And questions have risen pertaining to private credit's ability to generate outsized returns sustainably.

In our 2024 Allocator Outlook, we explore these recent developments, potential economic scenarios going forward, and their impact on private markets.

With an eye on private asset valuations, relative attractiveness to public alternatives, and the supply of capital, our outlook provides capital allocators a framework to evaluate the risks and opportunities across their private markets portfolio.

Download our free Allocator Outlook.

Best regards,

Zane Carmean, CFA, CAIA
Lead Analyst, Quantitative and Funds Research

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More Outlooks

2024 Healthcare Outlook

Burned by cost inflation and negative reimbursement trends, US health systems are beleaguered.

At the same time, healthcare investors have been spooked by some high-profile failed bets in biopharma.

Our 2024 Healthcare Outlook predicts that both forces will have a depressing effect on healthcare deals in both VC and PE—with possible exceptions for AI and anti-obesity drug companies.

Other topics covered include surgical robots, generative AI, and value-based care consolidation.

2024 US Private Equity Outlook

After a year characterized by a slowdown in dealmaking and fundraising, our analysts shared expectations for 2024 in their US Private Equity Outlook:

There is likely to be a substantial amount of new continuation funds as PE managers navigate a challenging exit landscape.

Fundraising overall may slide in the face of slower distributions.

Technology-focused funds are expected to outperform their generalist peers as the sector is buoyed by its resilient fundamentals and improving company valuations.

2024 US Venture Capital Outlook

Our analysts see moderate improvement on the horizon for the VC ecosystem on the back of economic strength and signals of easing rates.

Dive into our US Venture Capital Outlook for more:

Expect VC fundraising to increase slightly over 2023 yet continue to fall short of recent years.

We forecast nontraditional investors will reenter the asset class, giving some relief to VCs supporting portfolio companies.

The number of unicorns and their collective valuation is set to decline as more are forced to raise capital.

2024 European Private Capital Outlook

Economic uncertainty weighed on European PE and VC activity this year, but will the prospect of greater interest rate stability and improved market confidence bring a change of fortunes in 2024?

Read our analysts' predictions in our European Private Capital Outlook, including:

PE fundraising is expected to become even more concentrated in the region's biggest funds.

PE mega-deals will likely remain muted.

A recovery in VC-backed IPOs is unlikely, but there is hope for VC fundraising.

Thematic Research

Prime Time for Software

We're far from the heydays of the pandemic lockdown-induced software boom, but conditions are ripe for another strong run by PE-backed software companies.

Software providers' margins are up, tech deal counts are better than pre-pandemic levels, and SaaS business models remain compelling.

Despite a tough year, we estimate $164 billion in dry powder for tech-focused PE firms.

As the portfolios of Thoma Bravo and Vista Equity Partners bring in revenues rivaling top software corporations, our analysts dive deep into PE activity in tech:

read the free research

Webinars & Events

PitchBook at JPM 2024

Join us! Our healthcare analyst team will be on-site in San Francisco for the J.P. Morgan Healthcare Conference, which runs from Jan. 8-11.

For PitchBook clients, we're hosting an investor lounge on Jan. 9 where you can network, recharge, refuel, and connect with our analysts for in-person discussions around healthcare services and digital health. More details here.

We're also hosting a pair of free webinars:

Jan. 9: Though multiple biotech subindustries showed promise, setbacks have pushed VC toward new therapeutic applications. Our analyst Kazi Helal will discuss it all with a panel of VC biotech investors. Register here.

Jan. 11: Our team will recap JPM 2024 and share our most important takeaways from the private company-related presentations and discussions. Register here.

In the News

Our insights and data featured in the press:

Why consumer spending needs to stay strong for 2024's leading IPO candidates. [Yahoo Finance]

The value-based care enablement wave is coming. [Axios Pro]

What do rising token prices mean for VC activity in crypto? Our tech analyst Robert Le discussed that and other topics on Crypto World. [CNBC]

Why US PE middle market fundraising has been down. [WSJ Pro]

The key factor that has the commercial drone delivery market at a tipping point. [Yahoo Finance]

If you're a journalist interested in interviewing our analysts or requesting data, contact our PR team.

ICYMI

More of our recent research (* - report preview):

Market updates

US PE Middle Market Report
Global Real Assets Report
DACH Private Capital Breakdown
Japan Private Capital Breakdown
Global Private Market Fundraising Report

Thematic research

Industry & tech research

Credit research

Coming next week (subject to change)

A recap of our best research this year

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PitchBook News - What we expect in 2024

Older messages

Visions for enterprise, consumer tech in 2024

Many VCs have stopped writing checks

Emerging industrial tech's outlook for 2024

Analysts make VC 2024 predictions

A new year for allocators

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