What's Changing? - Growth

Please see below selected recent growth-related change.

See also:

What's New? - Middle Market

September 2022

What will it take for small businesses to recover and thrive in the post-pandemic world? Based on research from the Visa Economic Empowerment Institute, which surveyed more than 1,000 small businesses across the U.S., the key will be digitisation, with public-private collaboration to help increase internet connectivity, provide technical assistance with digital commerce and cybersecurity, and support digital payments.
For McKinsey, a sign of a thriving enterprise is robust and consistent revenue growth, but that has not been easy to accomplish over the past 15 years. Corporate growth slowed dramatically after the global financial crisis, with the world’s largest companies growing at half the rate they did before 2008. Furthermore, increases in capital investments outstripped revenue expansion, compressing returns. Now, with a slowing global economy, rising inflation, and geopolitical uncertainty, growth that delivers profits and shareholder value may become more elusive still.
Evidence proves that SMEs contribute more than their fair share to their nation’s wealth. SMEs represent roughly 90% of all firms and are responsible for 50% of employment worldwide, as well as up to 40% of GDP in emerging markets, according to The World Bank. Drilling down into national figures, the McKinsey report, Beyond financials: Helping SMEs thrive, found that in Canada midsize companies constitute 1.6% of all firms, yet contribute 12% of GDP. While in Malaysia, midsize companies represent 2% of all firms, yet contribute about 40% of the country’s GDP. The impact of those smaller companies is disproportionate.

August 2021

There are currently nearly 800 unicorns (private companies valued at $1B+) from 40+ countries around the world. Of those, about half are based in the US (50%), followed by China (20%).

January 2021

The Financial Times reported that more than 250,000 small businesses are at risk of collapse without further financial help from the government, according to a survey by the sector’s trade body that reveals the continuing damage on companies from almost a year under coronavirus restrictions. Just under 5 per cent of 1,400 companies surveyed for the Federation of Small Businesses quarterly index said they would shut their doors for good this year, a record level in the report’s 10-year history and more than double the comparable figure a year ago. Some 5.9m small companies operate across the UK, according to the government.
The Baltic states have the best ecosystem for start-ups to thrive, according to a global ranking by venture capital firm Index Ventures. Latvia, Estonia and Lithuania were deemed the most “start-up friendly” because of their favourable stock option policies, which allows young companies to attract talent and compete with larger firms offering higher pay. France, the UK, Portugal and Poland also made the top 10. European start-ups raised a record $41bn (€37.9bn) of venture capital in 2020.
Many startups are building their own globe-spanning networks of nanosatellites, enabling a new kind of everywhere, all-the-time connectivity for people, animals and assets on Earth. Scientists who track the health of penguins in Antarctica are managing their cameras from thousands of miles away - via tiny satellites orbiting above our heads. Energy companies are exploring using the same technology for monitoring hard-to-reach wind farms; logistics companies for tracking shipping containers; and agribusiness companies for minding cattle. It even helped National Geographic track a discarded plastic bottle from Bangladesh to the Indian Ocean, noted the Wall Street Journal.

December 2020

Research has found that the UK is on the verge of a 'lost generation' of entrepreneurs. A research study into people running businesses that were on track to scale-up and become major firms - people critical to the UK's economic recovery - has found that they are experiencing burnout and many are ready to quit entrepreneurship together.

November 2020

In venture capital, the strength of a start-up’s founder and leadership team is considered the most important factor when deciding whether or not to back it. A study, however, cast doubt on how much the founder actually matters - at least in the early stages. In a survey of 470 start-up founders and CEOs, Harvard Business School professor Tom Eisenmann found that personal attributes including age, education, and personality traits had no significant connection to the valuations of early-stage companies.This is in opposition to previous research and the common thinking among venture capitalists, who often frame their investment strategy as backing the jockey over the horse.
Quartz reported that hundreds of startup founders in Silicon Valley are reorganising their lives around the idea of “decarbonise everything.” A small but passionate group of founders and engineers are leaving companies like Tesla, or skipping the tech giants entirely, to take aim at what they call the biggest opportunity of a generation: climate tech.

October 2020

More than half of Europe’s small and medium firms, which employ two-thirds of Europeans, doubt they’ll survive the next 12 months. A McKinsey survey of 2,200 companies in France, Germany, Italy, Spain and the UK found 55% anticipate shuttering by September 2021 with one in 10 expected to file for bankruptcy within six months. The survey was conducted before the second wave triggered tough lockdowns. A predicted 5.4% growth in the EU economy in 2021 may not be enough to halt insolvencies, and the International Monetary Fund has urged governments to double down on state support.

September 2020

A new one-stop-shop climate action platform aims to help small and medium-sized enterprises curb carbon emissions, build business resilience, and gain competitive advantage. Ericsson, IKEA, Telia, BT Group, and Unilever have committed to support the new SME Climate Hub through a "1.5°C Supply Chain Leaders" group.
Alex Lazarow, a Bay Area-based venture capitalist, academic, and author. In his book Out-Innovate, Lazarow argues that this refresh is already underway, largely in emerging markets. There are 480 startup hubs worldwide, he points out, and 10% of unicorns are located outside Silicon Valley. In the era of coronavirus-fuelled uncertainty, he says startups should not strive to be like Silicon Valley unicorns, but instead like camels: capitalising on opportunity while focusing on sustainability and long-term growth - i.e. surviving droughts and pandemics from the get-go.
Venture capital firms are collaborating to keep Nigerian startups alive. Abuja, Nigeria-based early-stage fund, Ventures Platform, is collaborating with New York impact investor Acumen and LoftyInc, a Lagos-based investment firm to create a startup relief program to disburse emergency grants of up to $20,000 to early, high-growth stage startups that may require cash support. The non-equity grants could be a key lifeline for young startups during the pandemic, noted Quartz.
Quartz reported on emerging entrepreneurial hotspots:
- Bengaluru houses the third-highest number of tech startups globally and has secured 57% of India’s startup funding. The Garden City in the southern state of Karnataka is also India’s millennial billionaire capital, having produced 10 out of 17 self-made entrepreneurs under the age of 40.
- Shenzhen, home to Tencent and Huawei, among other tech giants, has the country’s largest consumer electronics market - Huaqiangbei - and is home base for China’s aspiring entrepreneurs and hackers.
- A Lagos neighbourhood is the centre of Nigeria’s $2 billion tech ecosystem. Several startups, including the Chan Zuckerberg-backed Andela, first set up shop in the Lagos suburb of Yaba, which is best known for being home to tech founders and colonial-era architecture.
As African countries began instituting lockdown measures in response to local coronavirus outbreaks, the pervasive fear across tech ecosystems was a sharp drop in dealmaking. Yet, in defiance of economic uncertainty as a result of the pandemic, African startups are increasingly notching multi-million dollar exits, Quartz explained.

January 2019

A global survey from ACCA highlighted international trade concerns among SMEs worldwide, and how they can maximise growth prospects.
KPMG US launched KPMG Spark, a technology-enabled solution for tax accounting for small and mid-sized businesses. The tool enables clients to comply with domestic tax reform legislation by using innovative technology, intelligent automation, and personalised services.
The solution will provide accounting assistance to clients from the pre-revenue stage to upward of US$50 million annually. It leverages the technology platform KPMG acquired from Bookly. The solution responds to new regulations required under 2017’s Tax Cuts and Jobs Act (TCJA) and expands Bookly’s previous offering, which solely provided cash-basis accounting assistance to small companies.
In The Top 20 Reasons Startups Fail, CB Insights broke down the top 20 reasons for failure by analysing 101 startup failure post-mortems.
In The Top 100 Venture Capitalists, CB Insights worked with The New York Times to develop a data-driven ranking of the world's best venture capital partners.
Meanwhile, in Game Changing Startups 2019, CB Insights highlighted the year's emerging trends to watch and high-momentum startups with world-changing potential.
In 2018, funding to Venture Capital (VC)-backed US companies hit a new high of $99.5B, despite a slump in deals. Deals last year fell to 5,536, down 5% from 2017, though later-stage mega-deals (worth $100M+) pushed annual funding up 30%, to hit its highest level since 2000. Read more in the CBI-PwC MoneyTree Report.
However, asking who needs venture capital anyway, Quartz noted that startups, increasingly seeing VC money as a “dangerous” path to an accelerated demise, are seeking alternate methods of funding.
Fintech is giving small businesses access to finance. Cut off from finance by big lenders, financial technology platforms are coming to the rescue for cash-starved small businesses, noted Raconteur.
Robotic process automation (RPA) software is streamlining workplace functions at large banks, including data entry, document review, transaction processing, and more. CB Insights mapped out 90+ startups using AI and machine learning to automate banking operations, from fraud detection to customer identity verification.

December 2018

In Start-Ups Aren't Cool Anymore, The Atlantic argued that a lack of personal savings, competition from abroad, and the threat of another economic downturn make it harder for millennials to thrive as entrepreneurs. Quartz added that millennials, saddled with debt and scarred by the financial crisis, have become jaded with the romance of entrepreneurship.
The state of the European startup ecosystem was released by Atomico. European VC funding hit $23bn in 2018, up from $5bn in 2012 (globally VC funding was $177bn in 2017, so Europe is still underweight on a GDP basis). Nearly half of women entrepreneurs say they experienced discrimination, and 93% of funds went to all-male teams. Founders are sanguine about the role of government and of the GDPR, claimed Exponential VIew.
The rise of consumer AI startups examined how Chinese apps like TikTok & Soul are a new breed of consumer AI product. "TikTok, for example, never presents a list of recommendations to the user, and never asks the user to explicitly express intent - the platform infers and decides entirely what the user should watch" while Soul, a dating app, uses "AI [to help] restore trust in anonymous chats".
The past decade or so has seen the dramatic growth of startup ecosystems around the world, from Shanghai and Beijing, to Mumbai and Bangalore, to London, Berlin, Stockholm, Toronto and Tel Aviv. A number of U.S. cities continue to dominate the global landscape, including the San Francisco Bay Area, New York, Boston, and Los Angeles, but the rest of the world is gaining ground rapidly, noted Harvard Business Review.
Of the 18 $1B+ acquisitions of tech startups in the last three years, a majority were by non-tech corporates like Walmart, Unilever, Allstate, and Roche, according to CB Insights.
Further reading:
- Female tech entrepreneurs are given less space to fail - FT

November 2018

Further reading:

October 2018

Economic growth, international trade and global expansion present complex challenges, argued Chatham House. On the one hand, the global system of open trade has brought substantial and widespread benefits to many. On the other hand, such growth has led to dislocation in certain industries and has introduced new risks and uncertainties into the lives of many people, such as the concentration of wealth and the degradation of the air, land and oceans.
Further reading:
- High-growth business lessons: 7 cautionary tales - Raconteur
EY noted that the increasing pace of disruption, shifting regulatory environments and constant changes in the global economy make this an exciting yet challenging time for businesses. EY believes family businesses often have an advantage, especially those whose strong family roots have already helped deliver generations of success.
Too many SMEs fail to plan more than a year ahead How vision and strategy helps small businesses succeed is the latest in a global research programme supporting small business growth from ACCA. This report outlines the governance needs of SMEs, where simple but effective practice over vision, strategy and human capital can provide them with greater flexibility, adaptability and resilience as they grow - read report.
PwC and CB Insights' Q3 2018 MoneyTree report highlighted the latest trends in venture capital funding globally. Dollars were up 17% in Q3 2018 as $27.5bn was invested across 1,229 deals. Deal activity declined for the first time since Q4 2017.
Further reading:

September 2018

The FT believes big companies are bending themselves out of shape to behave like smaller enterprises. They are encouraging individual teams to take more decisions closer to the frontline. Agile management is all the rage. Head offices are either disappearing altogether or morphing into shared working spaces.
However,, the FT also noted that many millennials end up at big companies. A 2016 survey by the US think-tank the Economic Innovation Group and EY found nearly two-thirds of American millennials had considered starting their own business, but only just over a fifth believed entrepreneurship was the best way to advance their career. In fact, 44% thought staying with one company and working their way up the ladder - like their parents may have done - was the preferable route.
Telia Company and Capgemini launched Coach Your Business (CYB), a mentor program for startups. Startups accepted to the program will, under a period of 6-12 months, get access to a range of experts in a range of fields; including first hand help, guidance and mentoring in investment, development, logistics, sales, technology and design.
Stripe is now among the world’s most valuable private startups. The payments firm recently closed a $245 million funding round(paywall) that values it at $20 billion. Stripe helps companies set up online billing and payment systems, and now counts Google and Uber among its customers.
Further reading:

August 2018

July 2018

The Boston Consulting Group created the DICE framework to help senior leaders predict whether an organisational change effort will succeed or fail.
Deals and dollars to private tech companies in Latin America hit a new high last year with 379 deals worth a combined $1.35B. Investments into the area have nearly tripled since 2012. CB Insights took a close look at Latin America's tech ecosystem and at which countries have piqued investor interest the most.
CB Insights analysed which investors have backed the most billion-dollar fintech startups and which ones have the most to gain if their portfolio companies pull off exits that match their valuations.
PwC and CB Insights' new Venture Capital Funding Report highlighted the 3x increase in quarterly mega-deals of over $100M+ since late 2016 and the massive run-up in dollars to AI startups.
Africa-based tech startups raised $169 million in the first half of 2018, more than they raised in all of 2017, reported GZEROMedia. Kenya and Nigeria, both of which have large English-speaking populations and burgeoning financial centres, were the top destinations for venture capital investment on the continent.
With over $8 billion in funding among them, WeWork, Opendoor, and Compass are operating on a different scale than any of their real estate predecessors, according to AngelList.
Worldwide announced Mid-Market M&A deals valued up to $500 million totalled US$963.9 billion for 2017, a 2.8% increase year-on-year, according to Thomson Reuters. According to estimates, global fees generated from completed Mid-Market M&A activity reached around US$17.4 billion for 2017.
See also:

June 2018

Entrepreneurs aged between 20 and 35 had on average already set up twice as many businesses as those over 50, a 2015 report from BNP Paribas found. Having a string of start-ups to your name before the age of 35 does not necessarily mean those businesses survive, however, noted the FT.
Even the most creative thinkers don't come up with ideas in a vacuum, claimed Inc., which asked founders who run some of the most disruptive companies to name the books that inspired them to think big in the first place.
GDPR will kill the innovation economy, warned Quartz, arguing that users are more keen to accept new privacy agreements from behemoths like Facebook than smaller companies, which could force more humble startups into extinction.

May 2018

The number of new unicorns per quarter decreased over the past year, but Q417 and Q118 produced 16 each — more than most quarters since 2013. And the numbers are even higher when companies that raised funding through cryptoassets or token financing are included. CB Insights looked at why the crypto unicorn should — or should not — be included in the coveted $1B valuation club.

June 2016

About 100 senior executives from 20 countries, representing a wide range of industries, convened for BCG's seventh European Strategy Leadership Summit. This year, with companies facing the twin challenges of an uncertain global economic environment and continuing digital disruption, the theme of the gathering was "Innovating for Growth: From Emerging to Mature Markets." The sense that emerged was that while growth is now harder to achieve, it’s not impossible. Finding good growth just requires thoughtfulness, more innovative approaches, and discipline.

May 2016

According to Experian, April saw Europe record a total of 571 transactions, a healthy rise of 11.5% on the 512 deals announced during March. This was reflected in deal values over the same period which rose to €43.1bn, an increase of 12.8% in comparison to the previous figure of €38.2bn recorded the previous month.

EY’s 2016 Global Capital Confidence Barometer continues to find a strong acquisition appetite together with a growing inclination to forge new alliances. Prolonged economic challenges are driving investment decisions, leading companies to ally and cooperate to generate growth as well as compete and acquire to gain market share. Key findings include: 50% expect to actively pursue acquisitions in the next 12 months; 40% of executives intend to enter alliances to accelerate top- and bottom-line growth; five-fold increase in appetite for US$1b to US$5bn deals; 74% considering cross-border investments and 37% expect distressed asset sales to become more prominent in deal making.

April 2016

After three consecutive year-on-year decreases, EU (ex UK) acquisitions of UK companies reached an annual record high of $206.0bn in 2015, up from $12.3bn in 2014. EU (ex UK) acquisitions accounted for 47% of total UK targeted M&A in 2015 ($442.4bn), a record high annual share and up from a 10% average share over the previous five years.

Worldwide M&A activity totalled US$699.4 bllion during the first quarter of 2016, an 18% decrease from comparable 2015 levels and the slowest opening period for worldwide deal making in two years. Twenty-two deals with a value greater than $5 billion were announced during the first quarter, their combined value down 24% compared to the first quarter of 2015. Overall, just over 9,250 worldwide deals were announced during the first quarter of 2016, a 10% decrease compared to last year.

Worldwide share issues dropped to a seven-year low in the first quarter of the year as market volatility claimed the hopes of companies seeking to list their stock. The value of total share sales, including secondary issues as well as flotations, more than halved to $106.6bn, the lowest since the immediate aftermath of the global financial crisis.

March 2016

Divestment is becoming a strategic business move to drive growth - and it's becoming part of many companies' future plans. In fact, 49% of companies plan to divest in the next two years, according to the Global Corporate Divestment Study from EY. The findings are based on interviews with 900 global corporate C-suite executives and 100 private-equity executives, as well as external data from nearly a decade's worth of divestments.

In the overall EMEA mid-market through late 2015, PwC and KPMG each advised on 222 deals and 206 accordingly. Rothschild with 170 deals represented the largest aggregate deal value - US$9.2 billion. Among the top ten financial advisors, Rothschild, M&A International and Citi exceeded their deal count totals from the same period a year ago, whereas the remainder lagged their own prior year totals through the first ten months. In the United Kingdom and Ireland, PricewaterhouseCoopers was the leading advisor in both the Financial Mid Market League Tables up to US$500 million and up to US$200 million, having advised on a total 83 deas valued at US$3.1 billion.

February 2016

Global M&A hit an adjusted record for year-end 2015 with approximately $4.7 billion in deals and deal makers expect 2016 to be extremely active as well. According to a recent survey of over 550 deal executives conducted by KPMG in conjunction with Fortune Knowledge Group, two industries are expected to be the most attractive for investors. The largest percentage of respondents (70 percent) said the most active industry would be technology. The second most active industry was expected to be pharmaceuticals and biotechnology (60 percent). Respondents also anticipate buyers to be active in the related industry segments of healthcare providers (47 percent) and media and telecommunications (42 percent).

January 2016

Global M&A volume increased for the third consecutive year to a record $5.03 trillion (tn) in 2015 YTD, up 37% from 2014 ($3.67tr) and surpassing the $5tr mark for the first time ever. Volume of 4Q 2015 so far recorded stood at $1.61tr, the highest quarterly level on record and accounting for 32% of this year’s total. In contrast, activity in 4Q 2015 at 8,481 deals was the lowest quarterly level since 3Q 2005 (7,995 deals). Volume was driven by 69 $10bn+ M&A deals, totalling $1.90tr, the highest annual volume on record. Healthcare was the most targeted industry for global M&A with $723.7bn, up 66% on $436.4bn from 2014 and the highest on record. Technology followed with a record $713.2bn, and Real Estate rounded off the top three $457.8bn, its second highest volume after 2007.

December 2015

Mergers hit a record high in 2015, with healthcare and technology firms leading a global spending spree that hit $4.86 trillion. That is bigger than the previous record of $4.81 trillion in 2007, immediately before the financial crisis struck. The increase was driven by mega-mergers – there were 67 deals worth $10bn or more each, totalling $1.9 trillion, more than double the value seen in 2014.

Buyout investors in Europe took advantage of high stock market valuations and a surge in corporate M&A to sell or list companies at a record pace in 2015, according to new data. Private equity groups exited €153bn of deals over the year, a third more than in 2014 and eclipsing the pre-crisis boom years of 2006 and 2007, the figures compiled by the Centre for Management Buy-out Research for the buyout firm Equistone show.

EY developed its '7 Drivers of Growth' to help companies align their capabilities with their growth strategy to accelerate their growth. This framework is the product of extensive research which examined the growth journeys of hundreds of companies around the globe – ranging from start-ups to leading businesses – as well as in-depth interviews with winners of its Entrepreneur Of The Year™ programme. EY's findings pointed to a stark need to move the conversation about growth and customer value beyond the traditional focus on people, systems and processes. By focusing on a broader set of capabilities, companies can accelerate growth and make it sustainable.

Global M&A volume in November 2015 totalled a monthly record high of US$606.6bn, up 7% on the previous monthly record of $567.1bn set in October 2015. M&A activity in November 2015, however, totalled 2,657 deals, the lowest monthly level since June 2005 (2,647 deals). Pfizer’s proposed $160bn merger with Allergan is the second biggest M&A transaction on record, behind Vodafone AirTouch’s $172.0bn acquisition of Mannesmann in 1999 . November 2015 global M&A volume was led by US targeted acquisitions totalling $390.9bn (64% market share), up 61% from October 2015 ($242.9bn), and the highest monthly volume for US targeted M&A on record.

Europe targeted M&A volume has reached US$1.03trillion in 2015 YTD, up 17% on the $883.8bn announced in 2014 YTD and the highest YTD level since 2008 ($1.29tr). Similarly, global M&A has increased 37% year-on-year to $4.68tr in 2015 YTD, surpassing the 2007 full year record volume of $4.61tr. The increase was driven by 171 $1bn+ deals with a total of $699.4bn so far this year, up 8% on 2014 YTD ($560.6bn). Deals valued over $10bn also increased to $301.2bn via 9 deals in 2015 YTD, compared to 10 transactions worth $167.6bn in 2014 YTD.

In the EMEA Mid-Market through November 30th, PwC and KPMG advised on 240 deals and 232, respectively. Rothschild with 208 deals, represented the largest aggregate deal value - US$11.5bn. In the United Kingdom and Ireland, PwC was the leading advisor in both the Financial Mid Market League Tables up to US$500m and up to US$200m, having advised on a total of 90 deals, valued at US$4.1 billion.

Grow from Your Strengths from Strategy& revealed four powerful approaches to unlocking growth that lasts. Its underlying tenet: You can grow profitably and sustainably only from a position of strength. Accomplishing this requires best-in-world capabilities - organisational strengths that truly differentiate you from the rest of the pack. Leveraging those strengths and developing new ones that boost your chosen way to play is the key to driving growth that lasts.

November 2015

The recent wave of mergers and acquisitions (M&A) is set to continue with 59% of global companies now planning to acquire in the next 12 months, according to the 13th edition of the Global Capital Confidence Barometer, a biannual survey of more than 1,600 executives, conducted by the Economist Intelligence Unit on behalf of EY. This report summarises the results of the latest survey, gauges corporate confidence in the economic outlook and identifies boardroom trends and practices in the way companies manage their capital.

In the overall EMEA mid-market through October 31st, PwC and KPMG each advised on 222 deals and 206 accordingly. Rothschild with 170 deals represented the largest aggregate deal value - US$9.2 billion. In the United Kingdom and Ireland, PwC was the leading advisor in both the Financial Mid Market League Tables up to US$500 million and up to US$200 million, having advised on a total 83 deals valued at US$3.1 billion. (Thomson Reuters has given PwC permission to share this report on Spark. Please do not share externally.)

October 2015

The 13th edition of EY's Global Capital Confidence Barometer found companies pursuing deals at a rate not seen this decade. As 2015 global M&A value approaches record highs, executives’ long-term growth considerations outweigh short-term concerns about market volatility. With deal intentions at a six-year peak, executives’ economic optimism is steadfast, and companies are pursuing bolder, more innovative growth strategies.In 2015 we have seen continued volatility in commodities and currencies, intense swings in equity markets and decelerating growth in several key emerging economies.Despite these challenges, companies remain confident about dealmaking in the current macroeconomic environment.

Global cross-border M&A volume has increased 27% year-on-year and stands at $1.08tr in 2015 YTD, surpassing the $1 trillion mark for the first YTD period since 2007 ($1.36tr). Cross-border volume accounts for 32% of total M&A volume in 2015 YTD, on par with 2014 YTD (also 32%), but down from the peak of 38% in 2007 YTD. Average deal size for cross-border M&A in 2015 ($348m) has surpassed the previous YTD record from 2007 ($293m).

Global M&A volume increased for the third consecutive period to $3.41tr in the first nine months of 2015, the second highest volume on record behind 2007 ($3.59tr). 45 $10bn+ deals were announced for a combined total of $1.15tr, a first nine month record high volume and activity. 10bn+ deals accounted for 34% of M&A volume, the highest first nine month share on record.