Scalable Sustainable Defendable: The HealthTech M&A Playbook in 2025

Scalable Sustainable Defendable: The HealthTech M&A Playbook in Today's market

In the 2025 HealthTech M&A market, Nelson Advisors are guiding founders to build and evidence scalable, sustainable and defendable businesses to attract strategic buyers and secure high valuation deals. Here is the playbook we see delivered week in and week out, grounded in current market dynamics, based on a front row seat view of the industry.

Scalable > UK and Europe

Prioritise technologies with cross-border potential and operational efficiency.

European buyers, including US firms seeking global expansion, are targeting solutions like telehealth, AI-driven diagnostics, and remote patient monitoring (RPM) that can scale across diverse healthcare systems.

The UK’s NHS and European integrated care systems (ICSs) are driving demand for interoperable platforms that integrate seamlessly into existing infrastructures.

For example, a telehealth platform with proven adoption in the UK could scale into Germany or France by aligning with local regulations and workflows.

Founders should demonstrate scalability through a growing user base, low-cost expansion models, and partnerships with regional healthcare providers, capitalising on the trend of increased cross-border deals.

Sustainable > UK and Europe

Focus on financial resilience and alignment with value-based care.

The UK healthtech sector, valued at £34.3 billion annually, has seen a funding pullback since 2021, with digital health investment dropping 34% in 2023 to £835 million.

High interest rates and inflation have exposed companies with high burn rates, particularly in overcapitalised segments like niche telehealth.

Buyers are prioritising firms with strong revenue growth (20%+ YoY), profitability and recurring revenue models, such as SaaS platforms for patient engagement.

For instance, a company offering RPM for chronic disease management with NHS contracts can demonstrate sustainable revenue.

Founders should optimise costs, secure long-term payer agreements and target preventive care solutions, which are gaining traction as healthcare systems shift toward outcome-based models.

Defendable > UK and Europe

Build moats through technology, partnerships, regulatory compliance, and cybersecurity. credentials.

Buyers in the UK and Europe value companies with strong intellectual property (IP), such as patented AI algorithms or FDA-cleared devices, which provide competitive barriers.

The sector faces intense cybersecurity threats, with breaches costing £1.3 million each in the UK, making robust data protection a priority.

Regulatory hurdles, like antitrust scrutiny and evolving telehealth laws, also demand compliance readiness. A healthtech firm with a secure, GDPR-compliant platform and a regulatory roadmap such as a predicate product for clearance, stands out.

Deep integration into clinical workflows, like a diagnostics tool embedded in NHS systems, further enhances defensibility by making displacement difficult.

Playbook > UK and Europe

Target strategic buyers like NHS aligned players or private equity firms seeking to bolster digital capabilities.

Showcase key metrics: customer retention, revenue multiples (currently 4-6x for high-quality firms), and clinical outcomes (eg. 25% cost reduction in patient care).

De-risk deals by addressing regulatory and cybersecurity concerns upfront, ensuring transparency with audited financials and compliance certifications.

Finally, align with market trends like AI, value-based care, and mental health solutions, while avoiding saturated segments like general telehealth, where buyer interest has waned.

By focusing on scalability across borders, sustainable financial models, and defendable tech and compliance, healthtech founders in the UK and Europe can navigate the 2025 M&A market and secure premium deals with strategic or financial buyers.

Scalable > USA

Focus on technologies with broad applicability and operational leverage.

Buyers, healthcare providers, tech giants, and PE firms, prioritise solutions that scale across patient populations and geographies, like telehealth platforms, AI-driven diagnostics, or remote monitoring systems.

For example, companies integrating AI to automate clinical workflows are seeing 4-6x revenue multiples due to their scalability. Build modular tech stacks that can integrate with existing systems, and target large, underserved markets (eg chronic disease management, mental health).

Demonstrate scalability through a growing, diverse customer base and low marginal costs for expansion.

Sustainable > USA

Prove financial and operational resilience. The market favours companies with strong unit economics, profitability, and recurring revenue models (eg., SaaS-based healthtech).

Buyers are cautious after the 2023-2024 wave of distressed healthtech startups, with unprofitable firms trading at 3-4x revenue or failing to sell.

Ensure sustainable growth by optimising burn rates, securing long-term contracts with payers or providers, and aligning with value-based care trends that emphasize cost savings and outcomes.

For instance, a digital therapeutics company with proven reimbursement pathways and payer partnerships is more sustainable and attractive.

Defendable > USA

Create moats through technology, data, and regulatory positioning. Proprietary AI algorithms, exclusive datasets, or FDA-cleared products provide competitive edges that buyers value.

Cybersecurity and compliance are critical, buyers avoid companies with data vulnerabilities or regulatory risks, especially with heightened antitrust scrutiny in 2025.

Build defensibility by securing patents, establishing first-mover advantages in niche markets (eg. AI for rare disease diagnostics) and maintaining rigorous data privacy standards. A defendable position also comes from deep integration into clinical workflows, making it hard for competitors to displace you.

Playbook > USA

First, target strategic buyers who value synergies, eg. a hospital system acquiring a telehealth platform to expand virtual care.

Second, showcase metrics that matter: customer retention, revenue growth (20%+ YoY), and clinical outcomes (e.g., 30% reduction in readmissions).

Third, de-risk through transparency, provide clear regulatory roadmaps, audited financials, and cybersecurity certifications.

Finally, position for premium valuations by aligning with market tailwinds like AI, value-based care, and patient engagement, while avoiding overcapitalised, low-differentiation segments like general telehealth, which face buyer fatigue.

By building a healthtech company that’s scalable, sustainable, and defendable, founders can navigate the cautious 2025 M&A market and secure deals with strategic or financial buyers seeking long-term value.

Nelson Advisors > HealthTech M&A

Nelson Advisors specialise in mergers, acquisitions and partnerships for Digital Health, HealthTech, Health IT, Healthcare Cybersecurity, Healthcare AI companies based in the UK, Europe and North America. www.nelsonadvisors.co.uk

We work with our clients to assess whether they should 'Build, Buy, Partner or Sell' in order to maximise shareholder value and investment returns. Email lloyd@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 and partnerships with insights, analysis and predictions in our LinkedIn Newsletter every week, subscribe today! https://lnkd.in/e5hTp_xb

#HealthTech #DigitalHealth #HealthIT #NelsonAdvisors #Mergers #Acquisitions #Growth #Strategy #Cybersecurity #HealthcareAI #Partnerships #NHS #UK #Europe #USA #Canada