"Healthcare M&A activity has been slower in 2025 than many investors and founders would've hoped, two bankers and a private equity investor said during a panel Monday at the HLTH conference in Las Vegas. But that pace appears to be picking up. Sasha Kelemen, a director in Baird's healthcare investment banking group, said during the panel that while digital health startups have historically been reluctant to merge with one another, she's beginning to see silver linings as companies "recalibrate expectations.""
"Nick Richitt, global cohead of healthcare services investment banking at JPMorgan, said he's seeing more early-stage VC-backed startups and investors come to the table to consider mergers in areas like virtual care. He hasn't seen the same willingness in previous quarters. "Why are we pursuing parallel roadmaps when we could pool our resources?" he said. Some virtual care combinations are already happening, across both early-stage and late-stage players, albeit many in the form of acquisitions."
Healthcare M&A activity slowed in 2025 before beginning to pick up as firms recalibrate expectations. Digital health startups that were once reluctant to merge are increasingly considering combinations to survive amid funding pressure. Investor and buyer attention has shifted toward AI, leaving many non-AI startups from the 2021 funding boom struggling to raise capital. Mergers and acquisitions are becoming a last-resort strategy, with early-stage VC-backed companies exploring consolidation particularly in virtual care. Some transactions are occurring as acquisitions with significant valuation markdowns. Examples include RemedyMeds acquiring Thirty Madison at a lower price than prior valuations. The trend reflects founders pooling resources to avoid running parallel roadmaps and preserve continuity.
Read at Business Insider
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