Nelson Advisors ask European Investors and Venture Capital funds: What are you really thinking about your HealthTech portfolio companies in today's market?
- Lloyd Price
- Jun 18
- 5 min read
Nelson Advisors ask European Investors and Venture Capital funds
Nelson Advisors mid 2025 research into how investors and venture capital funds are approaching their healthtech portfolios today has concluded 'with a mix of caution, strategic focus and a strong emphasis on proven value with sustainable growth, particularly in mid-to-late stage companies.'
While the frenzy of pandemic-era investment has cooled, our in depth conversations and market feedback shows there's still significant optimism for the healthtech sector, driven by long-term trends and the transformative potential of certain technologies and services such as AI Scribes, Medical Diagnostics, Non Invasive treatments and Genomics Data Management.
Here's a breakdown of our research into what European Investors and Venture Capital Funds are thinking, planning and hoping for, direct from the financial frontlines:
1. A Shift Towards Maturity and Proven Models
"Show me the money (or the clear path to it)." The days of investing in promising ideas without a clear path to profitability are largely over. Investors are pushing for returns and looking for companies with strong financial performance, demonstrable revenue, and clear scalability.
Focus on later-stage deals: While early-stage deals still exist, there's a trend towards "mega deals" and larger investments in more established healthtech companies that have already proven their clinical impact, market traction and ability to generate revenue. This indicates a desire to de-risk investments.
Consolidation and M&A: The market correction after the pandemic boom and zero interest rate environment is leading to increased levels of distressed M&A activity. Larger healthcare organisations and tech giants are strategically acquiring smaller, struggling companies to gain access to valuable technologies, talent, or market share.
2. The Dominance of AI and DeepTech
AI as the "engine of growth": Artificial intelligence (AI) is by far the biggest driver of investment in healthtech today. Investors are particularly keen on AI-powered solutions for medical diagnostics, health management, research solutions (TechBio), drug discovery, personalised medicine and operational efficiency.
DeepTech and breakthrough technologies: Beyond general AI applications, there's a strong focus on "deeptech" in healthcare, including areas like advanced biotechnology, genomics, and novel drug design leveraging AI. Companies with strong intellectual property and truly disruptive technologies are highly sought after.
AI for efficiency and workforce solutions: AI agents that can manage end-to-end tasks, analyse medical data, diagnose conditions, and coordinate treatment plans are seen as crucial solutions to workforce shortages and administrative burdens in healthcare systems.
3. Focus on Specific Therapeutic Areas and Trends
Preventative care and longevity: There's a growing demand for proactive and preventative healthcare solutions, driven by an aging population and increased consumer willingness to pay for out-of-pocket health services.Longevity startups, prevention-focused platforms, and advanced screening services are seeing substantial growth and interest from European Investors and Venture Capital Funds.
Chronic disease management: Solutions that help prevent or better manage chronic diseases are a significant area of interest, especially those leveraging data and AI for proactive monitoring.
Specialised areas: Oncology, women's health, and neurology are frequently cited as therapeutic areas attracting significant investment from our research sample of European Investors and Venture Capital Funds.
Direct-to-consumer (DTC) models: These models are gaining traction, especially in areas like GLP-1 inhibitors, supplements, and longevity products, reflecting a shift towards consumer-driven health.
4. Navigating Challenges and Opportunities
Funding gaps and extended timelines: Healthtech startups, especially early-stage ones, are facing challenges in securing funding. European Investors and Venture Capital Funds are more discerning and timelines between funding rounds is a lot longer.
Regulatory hurdles: The complex and stringent regulatory environment in healthcare continues to be a major concern, increasing development costs and delaying time to market. Companies that can demonstrate a clear understanding and strategy for navigating these hurdles are favoured.
Interoperability and data privacy: European Investors and Venture Capital Funds are looking for solutions that can seamlessly integrate with existing healthcare systems and prioritise robust data security and privacy measures (eg. HIPAA, GDPR compliance).
Evidence-based claims: Rigorous clinical evidence and real-world data are crucial for demonstrating the efficacy and safety of new healthtech solutions, which is essential in today's environment for investor confidence and market adoption.
Strategic partnerships and non-dilutive capital: Startups are increasingly encouraged to seek strategic partnerships with established companies or health systems and explore non-dilutive funding sources (eg. government grants) to extend their runway and not rely on European Investors and Venture Capital Funds to fill the funding gaps.
European Investors and Venture Capital funds are increasingly pragmatic and selective in their healthtech investments. Today, they are looking for companies that:
Have a clear path to profitability and sustainable business models.
Leverage cutting-edge AI and deeptech to solve significant healthcare problems.
Address major demographic and healthcare trends (eg. aging population, preventative care).
Can navigate regulatory complexities and demonstrate real-world clinical impact.
Have strong, experienced teams and are prepared for longer fundraising cycles.
While the current overall investment volume might not reach the peaks of 2021, European Investors and Venture Capital funds see the healthtech sector as resilient and poised for continued growth, particularly for those companies that can deliver tangible results and become infrastructure plays, integral to the delivery of modern healthcare.
Nelson Advisors > Healthcare Technology M&A
Nelson Advisors specialise in mergers, acquisitions & partnerships for Digital Health, HealthTech, Health IT, Consumer HealthTech, Healthcare Cybersecurity, Healthcare AI companies based in the UK, Europe and North America. www.nelsonadvisors.co.uk
Nelson Advisors regularly publish Healthcare Technology thought leadership articles covering market insights, trends, analysis & predictions @ https://www.healthcare.digital
We share our views on the latest Healthcare Technology mergers, acquisitions & partnerships with insights, analysis and predictions in our LinkedIn Newsletter every week, subscribe today! https://lnkd.in/e5hTp_xb
Founders for Founders > We pride ourselves on our DNA as ‘HealthTech entrepreneurs advising HealthTech entrepreneurs.’ Nelson Advisors partner with entrepreneurs, boards and investors to maximise shareholder value and investment returns. www.nelsonadvisors.co.uk
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