Over the past year, a change has taken place in how capital is being allocated. Investors are spending less time debating new themes and more time focusing on where pressure is building across the economy. Capital is increasingly flowing to businesses that sit inside those pressure points.

Recent buyouts make this visible. Transactions such as Smartsheet, Dun & Bradstreet, SolarWinds, and R1 RCM were not driven by optimism around discretionary IT spend. They reflect demand for systems embedded in payroll, compliance, data integrity, and billing. These platforms sit at the centre of daily operations. When budgets are under pressure and scrutiny increases, they are the systems companies protect rather than cut.

The same logic applies beyond software. PitchBook’s 2026 industry outlook highlights sustained private equity interest in electrical engineering and HVAC contractors as data centre construction accelerates, and in commercial aerospace parts suppliers as airlines extend the life of ageing fleets amid manufacturing constraints. In logistics, capital continues to favour specialised freight and infrastructure services that help companies manage tariffs and supply chain disruption. In each case, spending is driven by necessity, not preference.

Where investors are pulling back is just as instructive. PitchBook flags marketing software, analytics platforms, wellness beauty, AI imaging, and non-alcoholic or low-alcohol beverages as overheated subsectors. These categories face a common issue; competition has intensified faster than differentiation, making spend easier to delay, downgrade, or replace without immediate consequence.

For founders and CEOs, the test in 2026 is straightforward. How essential is your business? Investors will back businesses whose absence creates cost, risk, or operational failure for their clients, and will be cautious where demand depends on convenience rather than requirement.

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