After years of rapid expansion and innovation, the HealthTech mid-market is undergoing a structural shift. 2025 has marked a clear pivot from fragmented growth to transformational consolidation. According to PwC’s Global Health Industries 2025 mid-year update, global healthcare M&A volumes actually declined by roughly 22%, with deal values falling by 25%. Yet within healthcare services, a different trend is emerging; although deal volumes fell by some 25%, values rose approximately 50%, reflecting a market tilt toward larger, more transformational transactions.

Within this broader consolidation wave, digital health is a clear outlier. Galen Growth reports that European digital health funding rose 82% year-on-year in Q1 2025 to about $2 billion, while M&A volume increased by 21%. Investors are prioritising scale and integration, acquiring proven platforms that combine diagnostics, remote consultations, and data analytics rather than funding smaller, single-purpose applications.

This shift is underpinned by familiar pressures including tightening regulation, higher capital costs, and growing reimbursement complexity across Europe. Smaller independent players increasingly struggle to meet compliance and technology investment demands, while buyers favour scalable, interoperable assets with recurring revenues and defensible market positions.

As the HealthTech ecosystem matures, consolidation will remain the dominant theme, and the most attractive valuations will accrue to those leading integration and operational efficiency rather than resisting it.

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