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Industry Landscape
The Private Equity and Growth Capital sector for B2B software and services in the lower middle market is dynamic, driven by a demand for strategic partners beyond just capital. Firms like Elsewhere Partners are filling a niche by focusing on bootstrapped companies, offering 'transformational expertise' and extensive operator networks. This segment continues to see strong activity as companies seek to scale and optimize for exit.
Total Assets Under Management (AUM)
Total Private Equity Capital Under Management in United States
~$5.8 trillion
(15.0% CAGR)
- Growth fueled by institutional investor demand.
- Strong performance in tech and healthcare sectors.
- Increased dry powder for future investments.
Total Addressable Market
8.2 trillion USD
Market Growth Stage
Pace of Market Growth
Emerging Technologies
AI-Powered Due Diligence & Predictive Analytics
Utilizing advanced AI and machine learning to analyze vast datasets for faster, more accurate due diligence, identify hidden growth opportunities, and predict market trends within potential portfolio companies.
Hyper-automation & Low-Code/No-Code Platforms
The adoption of hyper-automation and low-code/no-code platforms by B2B software companies enables rapid application development, process optimization, and operational efficiency, directly impacting their valuation and scalability.
Decentralized Finance (DeFi) & Blockchain for Dealmaking
Blockchain technology could streamline deal structuring, escrow services, and asset tokenization, enhancing transparency and efficiency in private equity transactions, particularly for complex international deals.
Impactful Policy Frameworks
SEC Private Fund Adviser Rules (2023)
The U.S. Securities and Exchange Commission (SEC) adopted new rules under the Investment Advisers Act of 1940 to increase transparency and protect private fund investors by requiring specific disclosures, restrictions on certain activities, and mandatory audits.
This policy increases compliance burdens and operational costs for private equity firms like Elsewhere Partners, requiring enhanced disclosure practices and potentially altering fee structures.
Consolidated Appropriations Act, 2023 - Cybersecurity Mandates
This omnibus spending bill included provisions strengthening cybersecurity requirements for federal contractors and critical infrastructure, impacting B2B software and services companies that deal with government entities or vital sectors.
Portfolio companies in cybersecurity and IT infrastructure sectors will face stricter compliance standards, potentially increasing their operational costs but also creating new market opportunities for specialized services.
EU Digital Markets Act (DMA) & Digital Services Act (DSA) (effective 2024)
While primarily targeting 'gatekeeper' tech companies, these EU regulations aim to create fairer competition and safer online spaces, indirectly influencing how B2B software companies operate, especially those with significant user data or platform-like features.
For Elsewhere Partners' European portfolio companies, especially in business applications, these acts necessitate a review of data practices, interoperability, and competition compliance, potentially impacting market access and product development.
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