- Lloyd Price
Global HealthTech M&A predictions: next 12 months
Exec Summary:
The global healthtech M&A market is expected to remain active in 2023 and pick up pace in the spring/summer of 2024, driven by a range of macro/micro and additional factors:
Continued economic recovery: The global economy is expected to continue to recover in 2024, which will boost investment in healthtech companies.
Increased demand for value-based care: Healthcare payers are increasingly demanding value-based care, which is care that is delivered in a cost-effective and high-quality manner. Healthtech companies are developing innovative solutions to support value-based care, such as clinical decision support systems and population health management platforms.
Increased focus on health equity: There is a growing focus on health equity in the healthcare industry, as governments and other stakeholders are increasingly recognizing the need to address the disparities in health outcomes that exist between different groups of people. Healthtech companies are developing innovative solutions to support health equity, such as social determinants of health platforms and telehealth solutions that target underserved populations.
Based on these factors, the following are some predictions for healthtech M&A in 2024:
Continued consolidation of the healthcare industry: As the healthcare industry continues to consolidate, larger healthcare companies are likely to acquire smaller healthtech companies in order to gain access to new technologies and markets.
Increased investment from big tech companies: Big tech companies are likely to continue to invest in healthtech through acquisitions and partnerships. This is due to the fact that big tech companies see healthtech as a way to expand their reach into new markets and to capture new revenue streams.
Focus on specific healthtech sectors: There are a number of specific healthtech sectors that are likely to see increased M&A activity in 2024, including:
Telemedicine: Telemedicine is a rapidly growing sector that is attracting a lot of investment from both traditional healthcare companies and big tech companies.
Mental health: The demand for mental health services is increasing, and healthtech companies are developing innovative solutions to support mental health care delivery.
Digital therapeutics: Digital therapeutics are software-based solutions that are used to treat medical conditions. Digital therapeutics are a growing sector that is attracting a lot of investment from both traditional healthcare companies and big tech companies.
Increased focus on value-based care and health equity: Healthcare payers and other stakeholders are increasingly demanding value-based care and health equity. Healthtech companies that develop solutions to support value-based care and health equity are likely to be attractive targets for M&A.
Overall, the global healthtech M&A market is expected to remain active in 2024, driven by the growing demand for healthcare services, the increasing adoption of digital health technologies, the growing focus on preventive care, investment from big tech companies, and the continued economic recovery.
In addition to the above predictions, it is also possible that we will see some mega-deals in the healthtech M&A market in 2024, as big tech companies look to make more significant investments in the healthcare sector. For example, we could see a big tech company acquire a large healthcare provider, or we could see a big tech company acquire a major healthtech company.
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Macro Healthtech M&A predictions in the next 12 months:
More consolidation in the digital health space. As the digital health space continues to mature, we are likely to see more consolidation among companies. This will be driven by the need for scale, the need to access new markets, and the need to reduce competition.
Big tech companies will continue to invest in healthtech. Big tech companies such as Amazon, Google, and Apple are already major players in the healthtech industry, and they are likely to continue to invest in this area in the next 12 months. This is because they see healthtech as a way to expand their reach into new markets and to capture new revenue streams.
We will see more M&A activity in the area of preventive care. As the cost of healthcare continues to rise, there is a growing focus on preventive care. This means that companies that offer solutions that help people stay healthy will be in high demand.
More investment in preventive care solutions. As the cost of healthcare continues to rise, there is a growing focus on preventive care. This means that companies that offer solutions that help people stay healthy will be in high demand.
More innovation in the area of artificial intelligence (AI). AI is already being used in a number of healthcare applications, and this trend is likely to continue in the next 12 months. AI has the potential to revolutionize healthcare, and companies that are at the forefront of this innovation will be well-positioned for success.
More deals involving startups. We are likely to see more deals involving startups in the next 12 months. This is because startups are often at the forefront of innovation, and they can offer big tech companies and other established players access to new technologies and markets.
We will see more partnerships between healthtech companies and traditional healthcare providers. Healthtech companies are increasingly partnering with traditional healthcare providers to deliver care more efficiently and effectively. This includes partnerships between telehealth companies and hospitals, and between wearables companies and insurers.
We will see more M&A activity in the area of virtual care. Virtual care is becoming increasingly popular, and we are likely to see more M&A activity in this area in the next 12 months. This is because virtual care offers a number of advantages, such as convenience, cost-effectiveness, and access to care.
Micro Healthtech M&A predictions in the next 12 months
Six specific examples of HealthTech M&A transactions that could happen in the next 6 to 12 months:
A big tech company acquires a leading telehealth provider. This would allow the big tech company to expand its reach into the healthcare market and offer a more comprehensive suite of services to its customers.
A pharmaceutical company acquires a leading digital health company. This would allow the pharmaceutical company to gain access to new technologies and data that could be used to develop new drugs and treatments.
A health insurance company acquires a leading wearables company. This would allow the health insurance company to collect more data about its customers' health habits and use this data to tailor its products and services.
Amazon could acquire a telehealth company. Amazon has been expanding its healthcare offerings in recent years, and it could look to acquire a telehealth company to further this expansion.
Google could acquire a health data analytics company. Google has been investing heavily in health data analytics, and it could look to acquire a company that has a strong track record in this area.
Apple could acquire a wearables company. Apple has been one of the leading players in the wearables market, and it could look to acquire a company that has a strong portfolio of wearable products.
Potential surprises in healthtech M&A
There are a number of potential surprises that could come in healthtech M&A in the coming 12 months. Here are a few examples:
The failure of some healthtech companies. Some healthtech companies could fail in the coming years. This could lead to some M&A deals, as larger companies look to acquire the assets of these failed companies.
The rise of new technologies. The healthcare industry is constantly evolving, and new technologies are emerging all the time. It is possible that one of these new technologies could disrupt the industry and lead to a wave of M&A activity. For example, the rise of artificial intelligence (AI) could lead to the acquisition of companies that are developing AI-powered healthcare solutions.
The entry of new players into the market. The healthtech industry is becoming increasingly globalized, and new players are entering the market all the time. It is possible that one of these new players could make a surprise acquisition and shake up the industry. For example, a Chinese healthtech company could acquire a US-based company in a move to expand its global reach.
The entry of new players into the healthtech M&A market. New players could enter the healthtech M&A market in the coming years. This could include private equity firms, venture capital firms, or even healthcare providers. These new players could bring new ideas and new approaches to the market, which could lead to some surprises.
These are just a few examples of potential surprises that could come in healthtech M&A in the coming years. It will be interesting to see how the industry evolves and what kind of M&A activity we see in the years to come.
Engage with the HealthTech Community
HealthTech M&A Newsletter from Nelson Advisors - Market Insights & Analysis for Founders & Investors. Subscribe today! https://lnkd.in/e5hTp_xb
HealthTech M&A Advisory by Founders for Founders, Owners & Investors. Buy Side, Sell Side, Growth and Strategy mandates - Email lloyd@nelsonadvisors.co.uk
HealthTech Thought Leadership from Nelson Advisors - Industry Insights & Analysis for Founders, Owners & Investors. Visit https://www.healthcare.digital
