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%.
This year has seen a subtle but meaningful shift underway in capital allocation: US investors are looking more favourably toward the UK and Europe. One early indicator is the $10.6 billion that flowed into European ETFs in just the first quarter of the year, nearly seven times that seen in in the preceding quarter.
As highlighted in our July newsletter, European governments and industries are increasingly targeting high-tech TMT sub-sectors to strengthen defence capabilities and strategic autonomy across the continent. Technology is now the decisive factor in defence spending, making the TMT sector a central focus.
US markets have dominated global IPO activity in recent years, attracting European companies with greater liquidity, higher valuations, and more extensive analyst coverage. London, Frankfurt, and Paris have struggled to compete, with London raising only $208 million in the first half of 2025, according to Dealogic.
The healthcare software sector continues to see consolidation. According to Capstone Partners, deal activity in the healthcare IT sector increased for the third consecutive year in 2024, with over 260 transactions recorded globally.
In May we highlighted the “Silver Tsunami,” the wave of baby-boomer founders preparing to sell their businesses. The pipeline of opportunities is significant, but from our experience advising both entrepreneurs and investors, acquiring the business is often the easier part.
Artificial intelligence is steadily becoming a key tool for SMEs. Rather than grand, enterprise-level deployments, most SMEs find AI’s power in everyday problem solving. A University of St Andrews study from April suggests that AI adoptions could increase productivity in SMEs by anywhere from 27% to 133%.
Europe’s technology, media, and telecommunications (TMT) industry is experiencing increased market consolidation. Geopolitical tension and economic fragmentation are pushing major players to join forces, seeking scale, resilient infrastructure, and future-proof digital assets.
Vendor due diligence (VDD) is a sell-side, independent review prepared before deal launch and shared with potential buyers under NDA to provide initial assurance over the information they receive. In the UK mid-market, it can shorten timetables, widen the buyer pool, and reduce price chipping.
Defence is back as a top priority in Europe, with tech at the core. This allows investors to tap rising budgets and political backing. Those who align with Europe’s strategic goals and navigate the new rules can unlock long-term returns.