Welcome to our Q2 2024 Quarterly Report

Private Placements, ECM, and Debt

Global equity markets had a strong start in 2024, with improved IPO volumes. However, mixed signals from interest rates and inflation have influenced investor sentiment. Continued activity is expected in IPOs and secondary market offerings.
The continued decline in inflation supports the stability of interest rates. Consequently, attention is shifting towards small and mid-cap stocks and non-tech sectors.
In capital markets activity, there is an expectation of fewer landmark IPOs, with a focus on subsequent offerings and convertible issuances.
In private markets, projected fundraising is expected to surpass 2023 levels.

Healthcare

Biopharma
The European Next Biotech index rebounded slightly, up 5% year-to-date despite volatility. There are expectations for a gradual recovery in biopharma M&A and financing, supported by recent IPO activity and strategic acquisitions.
A gradual recovery of biopharma M&A and financing is expected, supported by encouraging early signals such as the return of IPOs on the continent after a period of inactivity.

Medtech
In Q2, the Medtech sector saw a decline in the number of deals, but the value of deals increased, surpassing $5 billion. Medtech outsourcing is consolidating rapidly and is expected to grow at a compound annual growth rate (CAGR) of 8.3%.
A strong recovery of Medtech M&A and financing is already evident in the pipeline and ongoing deals, with increased venture capital activity aiming to deploy capital.
There are also signs of IPOs picking up, which are expected to materialise in the coming 6 to 9 months.

Private care centres
In the clinical market, consolidation efforts prompted regulatory scrutiny, while significant M&A activity continued, such as acquisitions by investment firms. European mental health services experienced growing demand, with substantial deal volumes and ongoing acquisitions in providers.
Despite regulatory challenges, the private health centre sector is poised for rapid expansion, supported by increased investment and the adoption of new care models leveraging digital platforms to enhance accessibility and efficiency in healthcare delivery.

CRO/CDMOs
The pharma outsourcing sector rebounded in valuation since February amid a challenging 2023, with large CROs gaining on average 1x of EBITDA to 17.3x, bolstered by confidence in order levels and favourable regulatory developments.
Looking ahead, the second half of the year is poised for continued high activity as CRO market conditions stabilise. Robust M&A activity is anticipated to continue with a focus on small and midcap segments, driven by strategic buyers and PE-backed platforms seeking specialised capabilities.

Software & Fintech

Enterprise Software
As capital expenditures focus on artificial intelligence (AI) applications, the enterprise software sector faces challenges in digitalization projects. However, there remains strong demand for mission-critical software solutions, notably in Building Information Management (BIM), as evidenced by recent M&A activity such as Hexagon – Voyansi and Nemetschek – GoCanvas, highlighting sector attractiveness to strategic investors. The broader enterprise software market may see accelerated growth only upon recovery in industrial and construction projects.

Fintech
The fintech market has struggled YTD, with most publicly traded names posting negative returns due to stagnant transaction volumes and declining valuation multiples. Despite these challenges, there are indications of potential recovery. Forecasts from the European Central Bank suggest a possible rebound in household consumption and salary growth in the Eurozone, which could bolster consumer purchasing power and stimulate digital transactions, offering optimism for investors in the sector.

Energy Transition & Sustainability

Mobility
Over recent months, the mobility sector has seen increased transaction activity reflecting the maturity phase of each sub-segment. The Battery ecosystem continues to attract substantial capital injections, while Mobility Services providers focus more on profitability, with many achieving positive EBITDA or cash flow. This trend is driving consolidation efforts and heightened interest from private equity firms. In EV Charging, major CPOs are expanding their networks with significant infrastructure investments, while smaller players face growing M&A interest amid funding challenges. Market consolidation in shared mobility, aggregation platforms, and micromobility is a key theme for early 2024, expected to accelerate due to limited early-stage and growth-stage funding in recent years.

Agtech & foodtech
Alternative protein players are navigating a tougher market environment with increased scrutiny on commercial pipelines and industrialization plans. Fundraising now targets companies with strong operational and capital efficiency, amid opportunities in reduced round sizes and lower valuations for investors in food, feed, or ingredients sectors. There is significant potential in biologicals, driven by macro-trends like climate-induced abiotic stress, stricter regulatory controls on phytosanitary products, and a growing focus on soil health. Fundraising is poised to accelerate as firms gear up for commercial expansion. Positive outlook remains for alternative proteins, with critical considerations on unit economics and business models. Early signs suggest investors are reassessing sectors like indoor farming following recent market adjustments.

Green & recycled plastics
New recycling techniques are emerging to address the limitations of mechanical recycling, traditionally favoured in the plastics industry (with 99% of recycled content) despite yielding lower-quality material. Chemical recycling is gaining traction as an appealing alternative, enabling the production of high-quality new materials comparable to virgin polyester. Fiber-to-fiber recycling is also gaining momentum in the textile sector as fashion brands strive to achieve sustainability goals. Recent milestones in fiber-to-fiber recycling development, such as those by chemical recyclers, are addressing industry needs.
Investment activity in the plastic recycling ecosystem has increased globally by four to five times since 2018 and is expected to benefit from tighter regulations, which will boost demand and efforts to expand the sustainable materials industry.

Green gas & biofuels
Investment in biofuels is increasingly focused on biogenic waste, residues, non-food crops, and non-biological feedstock, intensifying competition for feedstock access and potential shortages. This shift underscores the need for innovative production enhancements and infrastructure investment. Concurrently, managing renewables to meet sectoral demands and mitigate grid congestion remains critical.
Biofuels investment has been dynamic, especially outside Europe where regulatory constraints are less stringent, allowing mature players to expand. Despite opportunities for consolidation and asset optimization, challenges persist in pricing and scaling alternatives. Future efforts will prioritize resolving feedstock bottlenecks and securing commitments for significant greenfield projects.

Industrial Tech

H1 2024 has seen further acceleration of financing activities and M&A transactions in the sector. Major strategic acquisitions in recent months and emergence of new domains like AI security have sparked a new wave of market activity in cybersecurity, with deal count in the first half of the year already exceeding that of 2023.
In industrial and simulation software, improvements in market conditions have encouraged companies to re-enter the market or initiate their first strategic operations, with significantly stronger financial and profitability metrics and improving confidence. The market is expected to continue its recovery, with several landmark deals anticipated in the second half of the year.
In the industrial automation sector, there is continuous consolidation around the topics of AI and 3D printing, alongside more traditional players seeking economies of scale.

Business & Tech-Enabled Services

Digital Media
The digital media sector is witnessing a shift towards data-driven marketing strategies, with significant advantages in customer acquisition demonstrated by high-growth companies. AI-powered technologies like chatbots and automated marketing are becoming integral, with widespread adoption among marketers enhancing operational efficiencies. Leveraging creators and influencers remains a potent strategy for brands, delivering competitive ROI comparable to other channels, driving the sector’s annual revenues past US$20 billion globally.
Looking ahead, the phase-out of third-party cookies by Google in Chrome is poised to reshape digital advertising, prompting a pivot towards first-party data strategies and contextual advertising solutions. M&A activity is expected to remain strong, driven by consolidation, the rise of tech-enabled service providers, and investment in emerging niches such as social commerce and the creator economy, fuelled by continued private equity interest.

Education
The Edtech market has expanded across all educational levels but faces declining funding since 2022, expected to persist into 2024. The Learning Management Systems (LMS) segment is booming, driven by mobile learning, AI advancements, and corporate training demands, set to grow significantly by 2030.
Looking ahead, consolidation in education through multi-specialist groups will intensify, leveraging cross-selling opportunities and operational efficiencies. Financial investors remain keen due to predictable revenues, high margins, and ESG priorities, though valuation multiples are stabilizing. Tech Bootcamps emphasizing practical digital skills training are poised to attract more working professionals and government interest in reskilling and upskilling initiatives.

NextGen Consumer

Consumer, retail & leisure M&A deal volume in Europe and North America declined in Q2, with strategic acquirers dominating (67% of deals), while PE interest rebounded notably in North America (40% of deals in June). Despite political uncertainties, the European market remained more active than North America.
Looking ahead, the consumer M&A market is poised for a rebound supported by easing inflation and stable interest rates. Corporates are expected to pursue strategic acquisitions to consolidate market positions and integrate fast-growing niche businesses. Financial sponsors are also likely to increase deal activity as they seek exits and deploy capital from recent fund raises.