K-shaped economy shows up in dealmaking
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Illustration: Brendan Lynch/Axios
The K-shaped economy is rippling into the dealmaking world.
Why it matters: It's not a new strategy, but companies and investors are focused on seeking even wealthier clients.
By the numbers: High-income households (over $125,000 earned annually) — saw cumulative real spending grow some 7.6% between 2023 and March 2026, per the NY Fed, while low-income households (earning less than $40,000 annually) increased just over 1%.
What they're saying: "Demand is becoming more polarized, with some families seeking value while others trade up for superior quality. This is a must-win trend for us," Nestle CEO Philipp Navratil said earlier this year.
- Unilever inked a deal for gummy supplements company Grüns (which charges $54.40 for a 28-day supply) for $1.2 billion in the spring, and Pepsi acquired premium tortilla company Siete for $1.2 billion last year.
- Yet pizza chains, the symbol of the affordable quick dinner, have struggled, with several now set to sell.
Zoom out: The bifurcation has extended beyond consumers into logistics, fintech and infrastructure.
- Providence Equity Partners-backed Rock-it Company acquired four companies in January to boost its fine arts transportation operations.
- L Catterton last year led an $800 million investment in private jet provider Flexjet. Private jet departures hit an all-time high in 2025, according to WingX data, and major airliners are refitting planes to increase business class capacity.
- Credit card companies focused on the ultra-wealthy have emerged in fintech. Atlas, which offers white-glove services with a $1,000 annual fee, earlier this year hit a $420 million valuation, and Karta raised $15 million last week.
- The $800 million Capital One Arena renovation in Washington, led by Arctos Partners and QIA-backed Monumental Sports, plans to increase premium seating capacity from 15% to 35%.
Case in point: Quince, valued at $10 billion, appears to have hit a new trajectory by pitching consumers on products that have a similar look and quality to luxury retailers.
- "The middle is being squeezed and is trying to maintain the lifestyle at a lower cost," says Notable Capital's Hans Tung, an investor in Quince.
The bottom line: Even if no dealmaker is touting a "K-shaped" investing strategy, the theme is suffusing the investing world.
