2023 saw stalled exits and fundraising across the financial markets. But as valuations start to stabilize and positive economic indicators suggest an unfreezing of deal activity, many investors are cautiously optimistic.
With each economic cycle, investment strategies need to be readjusted and refined. To mitigate risk and target emerging opportunities, investors need a continuous feed of financial data and market activity backed by expert judgment.
Let’s delve into how you can leverage PitchBook for market intelligence and look at how understanding economic shifts can help protect your investment strategies, especially in challenging market conditions.
What is market analysis?
Market analysis is a method of assessing a business’s target market within a certain industry. This process helps a business identify its ideal customer and how to sell to them, the expected demand for its product, and how its competitors are performing in comparison.
When conducting market analysis, relevant, timely, and accurate data is of the utmost importance. To properly understand market size, growth potential, and the competitive landscape, you need reliable qualitative and quantitative insights and information.
For investors, an extensive and thorough market analysis can help evaluate the future viability of a business, its offerings, and its industry.
How to perform market analysis with PitchBook
As traditional flows of capital evolve with new players like sovereign wealth funds, hedge funds, and mutual funds tapping into the private markets, investors need a strong sense of how the markets are shifting. It’s important to know which industries, verticals, and emerging spaces are growing and contracting to understand the bigger picture. It is equally important for investors to know where their competitors are placing their bets.
PitchBook’s historical data and analysis equips clients with a complete view of the global capital markets, including investments, valuations, exits, and multiples across industries. PitchBook can help you discover which sectors are on a growth trajectory with details about the size of funding rounds, which industries are shrinking, where money is being moved, and how much capital has been deployed over time by vertical, deal type, and more. For example, you could look at investment activity in US healthcare companies through later-stage VC deals since 2015. Just as easily, you could assess early-stage funding rounds for European education software companies since 2018.
You can also dive into the type and number of investors involved in a sector, which can help inform likely exit strategy. For example, a sector with a larger proportion of strategic investors implies a more mature market and a higher likelihood of acquisition than an IPO. All this information can help deepen your understanding of a market and its activities—and it’s all available on the PitchBook Platform.
Conduct market analysis with PitchBook
When analyzing a market, identifying the company’s competitors is key to understanding the landscape. On the PitchBook Platform, you can either auto-generate or custom build a presentation ready market map, charting competitors by your ideal metrics.
Market size estimates
Calculating market size enables you to estimate the growth prospects and profitability of a given market. PitchBook is constantly generating new unique market size estimates, with over 1.5 million available on the PitchBook Platform. Every single estimate is reviewed and validated by one of our researchers and links back to its source.
News, articles, and reports
Based on your search criteria, we serve up the most recent and relevant reports developed by the PitchBook Institutional Research Group. Their unparalleled research covers market updates, emerging tech, in-depth analysis on niche focus areas, performance insights, and much more.
Inform global dealmaking strategy with industry-defining research
With our best-in-class private and public market research comes unmatched expertise across geographic sectors and asset classes, empowering investors to stay ahead of market shifts and explore emerging opportunities. Reliable and timely sources of research help contextualize market activity data and substantiate claims.
PitchBook’s research enables you to:
- Gather information on market opportunities and challenges backed by independent research across asset classes, fund strategies, and geographies.
- Conduct global deep dives on how market volatility shapes investments, industries, and investor sentiment.
- Leverage innovative tools made in partnership with our Institutional Research Group, such as Market Size Estimates, analyst-curated industry verticals, our Custom Benchmarks feature, and much more.
Additionally, each quarter, we release a series of Emerging Tech reports focused on up-and-coming markets. These reports provide you with a deep analysis of the sector’s activities, participants, trends, cutting-edge startups, and more. Topics cover a diverse range of sectors, including:
Discover and track emerging spaces with PitchBook
Staying up to date on emerging spaces is an important aspect of market analysis and trend identification. Emerging spaces are nascent but growing areas that could become full-fledged industry verticals in the future. PitchBook users can find and stay on top of changes with our Emerging Spaces platform feature, gleaning insights on industry shifts as they map a path forward.
Created and updated by our in-house Emerging Technology and Industry Analysts and backed by methodology from our data scientists, Emerging Spaces offers an unparalleled look at up-and-coming industry development from agtech to generative AI applications.
To explore the Emerging Spaces feature, including how to access and navigate the toolset to dig deeper into relevant spaces, read our blog post.
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BLOG Discover niche spaces on the rise before your competitors with PitchBook’s Emerging Spaces |
Streamline the investment process with our VC Exit Predictor
As allocators, banks, and dealmakers scrutinize opportunities, identifying startups and funds that could generate the most profitable outcomes is key to navigating shifting economic landscapes.
Our VC Exit Predictor uses PitchBook’s datasets on VC-backed companies, financing rounds, and investors to target opportunities. The tool objectively scores startups in your scope of interest based on a classification that predicts the probability of an acquisition, IPO, or no exit event.
What are macro trends?
While market analysis focuses on specific sectors within an industry, macroeconomic trends cover the overall state of an economy by measuring GDP growth, interest, inflation rates, and employment. These overarching trends provide investors with a wider perspective of the economy at large, preparing them with key information about the direction of the markets.
According to Zane Carmean, Lead Analyst for Quantitative and Funds Research, understanding macro trends is also key to making sense of market activities. He explains:
“The macro environment can have a significant impact on private market portfolios, and keeping up with trends can help allocators identify, analyze, and manage risks and opportunities in their portfolios.” |
Access to wide data coverage is essential for investor success. As a member of the Morningstar family, the PitchBook Platform features public market data in addition to our industry-leading private market data. With our recent acquisition of Leveraged Commentary & Data (LCD), we now also provide a comprehensive view of the private debt capital markets—including insight into 20+ years of activity across the full credit lifecycle—and our analysts report daily on the leveraged loan market. PitchBook gives you the ability to turn macro trend analysis into market-level insights, enabling you to better inform their strategies.
PitchBook’s macro trend research
Gleaning insights on macro trends is easy with PitchBook. Carmean shares how:
“PitchBook data allows users to objectively analyze liquidity conditions, valuation trends, and the overall environment for private market dealmaking, providing powerful insights into shifting market conditions and the investment landscape.”
Our Quantitative Research Team is a crucial resource for contextualizing this data within the macro environment. Tasked with making sense of vast amounts of information and finding connections between disparate data sets, the PitchBook Quantitative Research Team enables our broader Institutional Research Team through macroeconomic research and meta-analysis. Each quarter, the team releases a Quantitative Perspectives report, featuring a top-level overview of activities across the markets. Carmean explains:
“PitchBook’s Quantitative Perspectives report series provides visually compelling and data-forward research on the key trends impacting private markets." |
We alternate between a deep dive VC report, a PE one, and a broader, allocator-focused US Market Insights that covers both PE and VC, as well as real estate, real assets, and debt markets. Each contain dozens of charts with analyst commentary on the macro environment and private capital.”
PitchBook clients can lean on these reports for a quick pulse check on changes in macro trends affecting the private markets, and how investor attitudes toward risk could be shifting accordingly.
Ensure your next move is the right move
PitchBook’s range of capital markets data is fundamental for private market intel and dealmaking professionals performing market and macro trend analysis. With our industry leading capital markets data, easy-to-navigate platform tools, and future-oriented macro and market research, you can stay on top of trends both large and small, instilling confidence into your analysis workflows and decision-making processes.
