Hinge Health and Omada Health IPOs set to increase HealthTech M&A multiples by boosting sector confidence

Lloyd Price
10 minutes ago
4 min read

Hinge Health and Omada Health IPOs set to increase HealthTech M&A multiples by boosting sector confidence

The Hinge Health and Omada Health IPOs, filed in March and May 2025 respectively, are poised to increase HealthTech M&A multiples by signalling strong investor confidence in digital health. These IPOs, among the first major ones in the sector after a two-year drought, highlight the appeal of digital health solutions like musculoskeletal care and chronic condition management.

This renewed optimism could drive acquirers to pay higher multiples for similar HealthTech firms, especially those with scalable SaaS or value-based care models.

Increased Investor Confidence and Sentiment

Validation of Business Models: Successful IPOs of prominent digital health companies like Hinge Health and Omada Health can validate the viability and scalability of virtual care models, particularly in areas like musculoskeletal (MSK) care and chronic disease management. This success can signal to investors that these companies have navigated the challenges of growth, patient engagement, and achieving meaningful outcomes.
Positive Market Signal: A strong performance in the public markets for Hinge Health and Omada Health would send a positive signal to the broader investment community regarding the potential of HealthTech companies. This can attract more capital into the sector, both for public and private investments, including M&A activities.
Reduced Perceived Risk: Successful IPOs can reduce the perceived risk associated with investing in HealthTech, especially in digital health solutions. This could make acquirers more willing to pay higher multiples for promising targets.

Benchmarking and Valuation Anchors

Establishing Public Comparables: The IPOs will create publicly traded comparable companies for valuation purposes. The trading multiples (e.g., EV/Revenue, EV/Gross Profit) of Hinge Health and Omada Health post-IPO will serve as benchmarks for valuing other private HealthTech companies, potentially leading to upward adjustments in M&A deals.
Increased Price Discovery: The public market will provide a more transparent valuation for these types of businesses, which can influence private market valuations and M&A negotiations. Sellers may point to the public market valuations to justify higher acquisition prices.

Strategic Implications for Acquirers

Fear of Missing Out (FOMO): If Hinge Health and Omada Health perform well in the public market, potential acquirers might feel pressure to act quickly and secure similar assets before valuations potentially increase further.
Enhanced Strategic Rationale: The success of these IPOs can strengthen the strategic rationale for acquisitions in the digital health space. Incumbent healthcare players (payers, providers, pharma) may look to acquire companies like Hinge Health or Omada Health, or their competitors, to enhance their digital capabilities, expand their service offerings, and improve patient outcomes and cost efficiency.
Availability of Capital: Publicly traded companies that see their valuations increase post-IPO may also have more capital (through equity or debt) to pursue strategic acquisitions, further driving M&A activity and potentially higher multiples.

Current HealthTech M&A Landscape and Multiples

While specific M&A multiples fluctuate based on various factors (company growth rate, profitability, market segment, etc.), the HealthTech sector has generally seen healthy M&A activity.
Recent trends indicate that acquirers are increasingly prioritising companies with strong recurring revenue, clear paths to profitability, and innovative technologies, particularly in areas like AI, telehealth, and data analytics.
As of early 2025, average revenue multiples for HealthTech companies were reported to be in the range of 4-6x, with potential for higher multiples for companies demonstrating exceptional growth or strategic value. The successful IPOs of Hinge Health and Omada Health could push the higher end of this range upwards, especially for companies with similar profiles.

Recent HealthTech IPOs as Precedents

While the digital health IPO market experienced a slowdown after a surge in 2021, there have been some notable IPOs in the recent past, such as Waystar and Tempus AI in 2024. The performance of these IPOs, along with the upcoming ones, will be closely watched by the market.
Omada Health itself filed for an IPO in May 2025, indicating a potential revival in digital health IPO activity.

The anticipated IPOs of Hinge Health and Omada Health have the potential to inject significant optimism into the HealthTech sector. Their performance in the public markets will likely serve as a barometer for investor sentiment and could lead to increased M&A activity at potentially higher valuation multiples as both strategic and financial buyers look to capitalise on the demonstrated success and future potential of digital health solutions.

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