The global PE market is on a remarkable growth trajectory, projected to expand from ~$500 billion in 2023 to ~$1,250 billion by 2033, at a CAGR of ~10%. PE & VC firms are increasingly recognizing the potential of SMEs as engines of innovation and growth. These investments are particularly concentrated in sectors with strong growth prospects and resilience, such as Healthcare, Information & Communication Technology, Consumer Goods & Retail, and Financial Services, creating lucrative opportunities for SMEs.

 

In H1 2024, PE firms demonstrated a strategic shift by increasing their investments in AI and ML by 3x, committing nearly $17 billion. This focus reflects the growing importance of technology-driven SMEs, which leverage innovative solutions to disrupt industries and create new market opportunities. The emphasis on such enterprises underscores the role of PE & VC firms in fostering transformative technologies and high-growth potential businesses.

 

SMEs continue to serve as the backbone of the global economy. They account for 90% of the private sector worldwide and generate over 70% of employment. The significance of SMEs is further emphasized by projections that 600 million new jobs will be required by 2030 to accommodate the expanding global workforce. In emerging markets, SMEs are already pivotal, creating seven (7) out of every 10 formal jobs, and highlighting their critical role in fostering economic stability and development.