Healthtech Takes Centre Stage for M&A Activity in Europe
In the recent wake of the UK government proposing a £100 million AI investment for healthcare and life sciences, the Healthtech sector has witnessed rapid growth and an impressive surge in M&A deals and transactions, during the third quarter of 2023.
In 2021, the UK Healthtech sector consisted of 4,353 businesses with a £30bn turnover according to data from the Office for Life Sciences, with governments set to accelerate the Healthtech ecosystems to drive industrial growth and maximise its vast global potential.
As we fast-forward to this year, the market landscape has transformed. Currently, we’re witnessing 40 European startups securing a staggering €232.6 million in capital, which underscores a vigorous acceleration of innovation in the Healthtech domain. In this article, we review the recent surge in M&A activity, the most active investors and noteworthy transactions in the Healthtech sector.
Surge in M&A Activity in Healthtech
This quarter has seen a surge in HRTech transactions within the healthcare segment, with a specific focus on workforce management and talent development deals. This reflects an industry segment that is more resistant to economic cycles, with a widening range of specialist HR Technology solutions.
Many health systems have prioritised enhancing workforce management practices and investing in employee education and training to drive efficiency. With the rapid advancements in healthcare technology, we’re witnessing the emergence of more sophisticated, mature products. As a result, industry players are increasingly looking to consolidate their offerings, aiming to create comprehensive, one-stop-shop solutions for healthcare HRTech.
Philip Albright, HRTech M&A Advisor at Goldenhill International says:
As healthcare systems prioritize the enhancement of workforce management practices and invest in employee education and training, efficiency becomes the cornerstone of progress. With the rapid advancements in healthcare technology, we’re witnessing the emergence of more sophisticated, mature products, driving industry players towards consolidation, aiming to create comprehensive, one-stop-shop solutions for healthcare HRTech.
The Most Active Investors in Healthtech
In 2023, early-stage European Healthtech are riding the wave of optimism. Despite a dip from last year’s blockbuster $12.5 billion funding, they’ve secured an impressive $7.7 billion, showcasing resilience that surpasses the broader European VC landscape.
The sector’s trajectory is clearly upward, with startups raising $1.5 billion in the second quarter alone — the most robust performance since Q4 2021. Anticipating reporting lags, this figure is expected to climb in the months ahead.
Octopus Ventures, who is one of the most active investors in the UK, backed the likes of hearing health platform TympaHealth and therapy platform HelloSelf in 2023, with a focus on decentralised healthcare and technology. Here are some of the top investors who have been instrumental in driving early-stage Healthtech deals (including follow-ons) this year and are instrumental in propelling the Healthtech revolution in Europe:
NLC (Amsterdam) – Focus: Medtech, digital health, biotech, and sustainability in healthcare. Healthtech investor NLC recently announced the initial close of €100M health impact find to back 40 high-impact ventures, in a bid to benefit patients and the healthcare system.
Calm/Storm Ventures (Vienna) – Focus: Digital health in Europe and the US. Calm/Storm Ventures have recently been named the number one early-stage healthtech investor in Europe after closing €16M of a €40M target.
EIC Fund (Brussels) – Focus: Deeptech startups in healthtech. In 2023, 18 of the EIC’s early-stage healthtech deals have been in the healthcare devices field. The fund tends to invest €500k-15m, exclusively in European startups.
Scottish Enterprise (Glasgow) – Focus: Life sciences. The Scottish Enterprise has pumped more than £12 million into startups this year, including biotech Kynos Therapeutics.
Sofinnova Partners (Paris) – With a focus on Robotics, AI, medtech, digital therapeutics, and biotech, Sofinnova Partners have backed startups like cutting-edge digital medicine company, Kiro, early stage medical device company, Moon Surgical and biopharmaceutical company, Sitryx Therapeutics, with its latest fund being announced in March of this year.
Octopus Ventures (London) – Focus: Personalised diagnostics, decentralised healthcare, and healthcare value chain technology. Known for being one of the most active investors in the UK, this year has seen Octopus Ventures back several decentralised healthcare and technology startups in a bid to remove friction in the healthcare value chain.
Noteworthy Transactions in Healthcare Tech
This quarter was marked by a surge in HRTech transactions within the healthcare segment, with a focus on workforce management and talent development deals. This reflects an industry segment that is more resistant to economic cycles and the range of specialist HR Technology solutions increasing.
Many health systems have turned to enhancing workforce management practices and educating and training their employees to increase efficiency. With advancements in healthcare technology, we are witnessing the emergence of more sophisticated, mature products. As a result, industry players are increasingly looking to consolidate their offerings and create comprehensive, one-stop-shop solutions for healthcare HRTech.
Some standout transactions in healthcare HRTech this quarter include Travel Nurse Across America’s acquisition of Stogo, a healthcare staffing and scheduling software; Aya Healthcare‘s acquisition of Polaris AI, an AI-based healthcare staffing and scheduling platform; and Home Care Pulse’s acquisition of Teaching Transitions, a training platform for staff and volunteers.
View our Q3 2023 HRTech Report
To find out more about the emerging trends and notable M&A transactions in HR Technology during the third quarter of 2023, download our latest report here.
Author: Philip Albright
Highly-experienced M&A advisor with a particular emphasis in HR Technology (HRTech) and the Human Capital Management sector globally; assignments range from working with leading SaaS businesses in HRTech as well as continuing to advise traditional recruitment and staffing firms.
In my career spanning more than 25 years, I have advised on Workforce Solutions sector M&A transactions in over 30 countries throughout the world. I work with both buyers and sellers of businesses within these fields.
Additionally, I have a strong personal interest in the related fields of data science, machine-learning and Artificial Intelligence. I also work closely alongside the ESG M&A team and assist the team with M&A deals within the ESG sector.
If you are an owner or senior executive of a HR-or ESG-related business interested to discuss how M&A could help you accomplish your objectives – please get in touch.