Private Market Intelligence – May 2025
In this article:
Boring Businesses Worth Reading About
In a world chasing AI and clean energy, private capital finds opportunity in services that stay grounded—like HVAC and lawn care.
South vs. North: Why Mexico Still Wins the Nearshoring Battle
Rising tariffs and geopolitical shifts are reshaping supply chains. The question isn’t whether to nearshore—it’s where.
A New Path to Business Ownership and Investment
Entrepreneurship Through Acquisition (ETA) is gaining steam. Learn why more investors are backing operators instead of building from scratch.
Boring Businesses Worth Reading About
In a world obsessed with AI and the search for unlimited clean energy, it might feel weird to read about HVAC and lawn care, but private capital isn’t just chasing shiny objects. It’s also doubling down on services that are, quite literally, grounded. Call it boring. But the dollars are real.
Let’s start with lawn care. A surge of retiring baby boomer business owners—known as the “Silver Tsunami”—has left behind a trail of profitable, often family-run lawn care companies without a next generation to take the reins. Enter private investors. With low barriers to entry, recurring revenue through seasonal contracts, and a still-fragmented industry, lawn care has become ripe for roll-up strategies, with M&A transactions in the space increasing by over 10x in the last decade1. Once you put a few of them together, you bundle services (like fertilization, snow removal, and pest control) and add operational polish through tech and branding.
On the other side of the yard, HVAC companies offer a different kind of appeal. They’re less seasonal, more recession-resilient, and deeply embedded in both residential and commercial infrastructure. They come with higher barriers to entry—think certifications, technical labor, and regulated operations—but that also means higher exit multiples and stronger year-round cash flow. HVAC is harder to scale fast but ideal for investors seeking stability and stickier contracts (recurring maintenance, emergency repairs, smart home integration).
The rise of companies like Sunday Lawn Care—which uses satellite data, soil testing, and subscription models to deliver eco-friendly solutions—proves the space isn’t just about mowers and mulch anymore. It’s about data, margins, and scalable platforms. Sunday has raised over $80 million from the likes of Sequoia Capital and is reimagining what a lawn care company can be.
The Takeaway
If you’re an individual investor or family office looking for quicker wins, lawn care offers a lower-cost entry, faster deal flow, and the chance to build something big from something simple. If you’re after long-term, steady cash flows and can navigate more complexity, HVAC might be the more durable play.
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South vs. North: Why Mexico Still Wins the Nearshoring Battle
Nearshoring isn’t a trend anymore—it’s a necessity. The move to bring U.S. supply chains closer to home to reduce risk, lower costs, and shorten delivery times has become a strategic necessity for companies and investors alike. As global supply chains get tested by rising tariffs and geopolitical maneuvering, the question isn’t whether to nearshore—It’s where. And if you’re choosing between Mexico and Canada, the numbers point clearly south.
Mexico continues to draw capital. Foreign direct investment from Foxconn, Nvidia, and Amazon is flowing into industrial corridors like Monterrey and the Bajío, where vacancy rates for warehouse space have hit historic lows1. In 2024, Mexico edged out Canada as the U.S.’s top import partner (13.8% vs. 12.1%)2, highlighting its deep integration into U.S. supply chains. Despite tariff pressure, Mexico still comes out ahead on labor costs, logistics efficiency, and manufacturing infrastructure.
Data shows that under current U.S. tariff scenarios, Mexico’s auto exports to the U.S. are projected to drop 40–50%, while Canada faces deeper declines of 53–68%. The trend holds across sectors: in electronics, machinery, and apparel, Canadian exports contract more sharply3. Tariffs hurt both markets—but they hit Canada harder, largely due to higher wage structures and operational costs.
The Canadian nearshoring thesis is also clouded by political uncertainty. A new administration in Ottawa could reshape trade priorities, but how that plays out with the U.S. remains to be seen. Meanwhile, Mexico continues to benefit from long-term infrastructure investment and a labor force that, while seeing rapidly rising minimum wages, remains meaningfully cost-competitive compared to the U.S. and Canada.
The Takeaway
Nearshoring is being stress-tested, but the fundamentals remain intact—especially in Mexico. If you’re looking for exposure to resilient supply chains and long-term industrial tailwinds, Mexico offers the more compelling case. Canada may bring more policy stability, but Mexico is where nearshoring has stronger momentum.
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A New Path to Business Ownership and Investment
Entrepreneurship Through Acquisition (ETA) is gaining momentum as a compelling private investment strategy. The model is simple: acquire a small business, step into an operating role, and create value directly. The approach is attracting capital and delivering strong returns.
By the way, businesses in the HVAC and lawn care sectors have become very popular in ETA for the same business fundamentals described above.
Hear more from one of the industry’s thought leaders, Professor Les Alexander of UVA’s Darden School of Business.
