A focus on SMEs
By portfolio company size
What is private equity’s role in supporting SME employment?
SMEs are the backbone of the European economy. Its growth engine. Most small companies aspire to grow and private equity helps them graduate to the next level. Ambitious local businesses with a handful of staff and a bright idea can become multinational corporations employing thousands. Private equity can identify the best and help them achieve their ambitions.
Employment
There are 2,592 companies in the 100-199 employees size category, which is 12% of all SMEs backed by private equity. This group contributes the most to total SME employment with 367,978 employees, or 35% of total SME employment.
The 0-49 employee size category contributes the second most to total SME employment: 293,680, or 28% of the total. Additionally, the 0-49 employee size category includes 15,563 companies – 70% of the total – making it the largest by number of businesses.
SME employment 2024
By company size
Key to employment by company size
• 0-49: 293,680 employees
28% of total
15,563 portfolio companies
• 50-99: 228,129 employees
22% of total
3,238 companies
• 100-199: 367,978 employees
35% of total
2,592 portfolio companies
• 200-250: 163,966 employees
16% of total
734 portfolio companies
Note: SMEs are categorised as companies with up to 250 employees.
>1 million
people were employed in
22,127
SMEs backed by private equity in 2024
Job creation
Private equity is a major driver of business and job creation among European SMEs. Many companies depend on investment and support to realise their growth potential, and they achieve it faster with private equity backing. When analysing the job creation rates revealed by this research, they should always be compared to average market growth rates.
In Europe in 2024, the overall net change in employment was +1%.
Source: EDC / Eurostat / UK ONS
SME job creation 2023-24
By company size
Job creation by company size
Across SME categories from 2023-2024 job creation rates were in a range between -1% and +7%.
Leading the pack in job creation rate was the 200-250 employee SME category (+7% job growth rate), creating 7,428 jobs.
The most net jobs created from 2023-2024 were in the 100-199 category: +13,785 jobs created, or 55% of the SME category total.
Key to job creation by company size
• 0-49: –1,802 employees
–1%
7,890 portfolio companies
• 50-99: +5,735 employees
+4%
2,132 companies
• 100-199: +13,785 employees
+6%
1,823 portfolio companies
• 200-250: +7,428 employees
+7%
527 portfolio companies
79%
of the studied sample were SMEs
+25,146
new jobs created in private equity-backed European SMEs in 2024
A focus on SMEs
By portfolio company geography
SME employment & job creation by geography in 2024
By geographic location of portfolio companies
The top 3 countries which saw the largest increases in number of employees within the SME universe in 2024 were:
+12.5%
+10.5%
+7.1%
SME employment by geography
As early stage investors in innovative, start-up and seed stage companies, private equity plays an important role in SMEs.
SME employment by region
Companies based in France & Benelux were the largest group of private equity-backed SME employers in Europe, with a total of 399,924 employees in 2024 (38% of the total SME employment).
SME employment in 2024
By region and top five sub-regions
Île-de-France
120,072
employees
London
81,231
employees
SME employment by top sub-region
SMEs backed by private equity in European sub-regions (areas within countries) were significant employers in 2024.
SME job creation by geography
With the right support and investment SMEs can grow fast, and create jobs fast. As we see from the data in our study, the fastest growing areas are seeing rises in private equity-backed jobs of up to 32%.
Overall employment in private equity-backed SMEs had an increase of 25,146 people (+3.9%) in 2024.
SME job creation by region
The top three regions for job creation in 2024 were Southern Europe (+8%), France & Benelux (+5%) and UK & Ireland (+3%).
SME job creation in 2023-24
By region, and top five sub-regions
SME job creation by top growth
per sub-region
Many private equity-backed SMEs in European sub-regions (areas within countries) grew employment at significant rates in 2024, despite macroeconomic uncertainty during the year.
Southern Great Plain
+32%
job creation
Northwestern Region
+30%
job creation
Note: Analysis excludes those sub-regions with less than 10 companies and less than 100 employees in 2024.
A focus on SMEs
By portfolio company sector
SME employment by company sector
Private equity is a natural partner for companies driven by innovation, R&D or technology.
With private equity investment and expertise, companies can get to market quicker or expand market share more rapidly. These are crucial factors for business success and job creation.
Largest SME employment sectors
Information Communications Technology (ICT) was a key sector for European SME jobs in 2024, accounting for 37% of all private equity- backed SME employment in Europe.
Business Products & Services and Consumer Goods & Services were also important sectors, both representing around 17% of SME employment.
Additionally, Biotech & Healthcare represents a significant proportion of private equity-backed SME jobs (11%).
SME employment 2024
By company sector
Top SME sectors for European private equity-backed employment
Information Communications Technology (ICT)
37% of total
387,796 employees
8,656 companies
Business Products & Services
17% of total
182,580 employees
2,979 companies
Consumer Goods & Services
17% of total
180,665 employees
3,422 companies
SME employment 2024
By portfolio company sector
SME job creation by company sector
When the right investment partner gets involved with the right company, chemistry happens.
Private equity firms bring together experience from entrepreneurs, management consultants and financial experts to really drive growth at the companies they back. The result can be job creation that far outpaces the averages for companies and sectors across Europe.
Top SME job creation sectors
Energy & Environment was the sector with the highest growth rate in employment in 2024 (+13%), followed by Agriculture (+8%), and Real Estate (7%), two sectors that have never been among the top 3. SMEs in ICT created 7,323 jobs, the highest sector in absolute numbers, with a growth rate of 4%.
Note: In this analysis, we excluded sectors for which the number of portfolio companies was low (under 100 companies)