The "Series A Off-Ramp" defining the European HealthTech landscape for the foreseeable future

Nelson Advisors
9 hours ago
15 min read

Introduction: The End of the Hypergrowth Era and the Emergence of the Off-Ramp

The European healthtech and medtech ecosystem is currently navigating a period of profound structural transformation, a phase that can be best characterised as "The Great Calibration." Following the unprecedented capital liquidity of the 2020–2021 vintage driven by zero-interest-rate policies (ZIRP) and pandemic-induced digital health adoption, the market has settled into a new, unforgiving equilibrium. The period from 2023 through 2025 has not merely been a cyclical downturn but a fundamental resetting of the venture capital lifecycle, particularly at the critical junction between Series A and Series B financing.

For a generation of startups that raised Seed and Series A capital during the boom years, the path forward has bifurcated. The traditional "escalator" model of venture capital, where a Series A round leads predictably to a Series B growth round, followed by Series C scaling and an IPO, has broken down for the vast majority of market participants. In its place, a new phenomenon has emerged: the Series A Off-Ramp.

This concept refers to the increasing necessity for early-stage companies to seek liquidity events, strategic consolidation, or restructuring significantly earlier in their lifecycle than historical norms would dictate. This report provides an analysis of this off-ramp dynamic. It examines the macroeconomic pressures creating a "Series B Crunch," the rise of venture-to-venture (V2V) consolidation as a primary exit mechanism, the complex role of private equity in the lower-middle market, and the resurgence of distressed M&A and insolvency proceedings.

Furthermore, it analyses the divergent regional realities across the United Kingdom, the DACH region (Germany, Austria, Switzerland), and France, providing a nuanced view of how regulatory frameworks like the European Health Data Space (EHDS) and the EU AI Act are reshaping the exit landscape.

The Macro-Structural Context: From Abundance to Austerity

To understand the Series A off-ramp, one must first quantify the contraction in the growth-stage capital markets. The data from 2024 reveals a stark dichotomy between the resilience of early-stage (Seed/Series A) valuations and the collapse of Series B deal volume.

According to market data from Carta, while the median pre-money valuation for Series A healthcare companies remained elevated at approximately $37.4 million in Q4 2024 (a 2% year-over-year increase), the volume of capital available for the subsequent stage has evaporated. Total investment in Series B healthcare in Q4 2024 was 84% lower than the peak in Q4 2021. This creates a massive supply-demand imbalance: a surplus of Series A companies are competing for a scarce pool of Series B capital.

This bottleneck is further exacerbated by the lengthening of fundraising timelines. The median time between a Seed round and a Series A has extended to 774 days (2.1 years), an 84% increase from three years prior. In the healthtech sector specifically, the 75th percentile wait time for Series A funding is approaching 1,000 days. This elongation forces companies to stretch their runways well beyond their original operating plans, often necessitating bridge financing. In Q4 2024, nearly 37% of all Series A funding events were bridge rounds. While these bridges provide a temporary lifeline, they often come with structured terms that complicate the capitalisation table, making a clean Series B raise even more difficult and pushing founders toward M&A alternatives.

The implications of this data are clear: the "Series A Off-Ramp" is not merely a contingency plan for failing companies; it has become a strategic imperative for viable businesses that simply cannot access growth capital in a market that has fundamentally repriced risk.

The Mechanics of the Series A Off-Ramp

The off-ramp is not a singular pathway but a collection of exit mechanisms ranging from strategic trade sales and private equity roll-ups to distressed asset sales and insolvencies.

Venture-to-Venture (V2V) Consolidation

A defining trend of the 2024–2025 market is the dominance of venture-to-venture acquisitions. Data from Galen Growth indicates that V2V transactions accounted for approximately 75% of recorded acquisitions in the first half of 2025. This surge is driven by "Scale-Ups"—late-stage, well capitalised unicorns (Series C and beyond), using their balance sheets and stock to acquire Series A innovations.

The Logic of Consolidation

For the acquirer, these deals are often "acqui-hires" or technological "tuck-ins." In a market where engineering talent, particularly in Generative AI, commands a premium, acquiring a Series A startup is often more cost-effective than organic recruitment. Furthermore, the fragmentation of the European market, with its disparate regulatory regimes and reimbursement pathways, makes organic cross-border expansion slow and costly. Acquiring a local player with established regulatory approvals (such as DiGA listing in Germany or HAS approval in France) provides an immediate foothold.

Case Study: Doctolib’s Expansion Strategy

The French unicorn Doctolib exemplifies this consolidation strategy. Having secured a dominant position in appointment booking, Doctolib has aggressively expanded into teleconsultation and practice management software through acquisitions. Its purchase of MonDocteur in 2018 set the template: acquire the closest competitor to secure market dominance. More recently, the company has faced regulatory headwinds for this strategy, but the underlying logic remains: in a winner-takes-most market, the Series A off-ramp for smaller competitors is often absorption by the category leader.

Case Study: Kry / Livi

Similarly, the Swedish digital health giant Kry (operating as Livi in the UK and France) has utilised acquisitions to bolster its hybrid "digi-physical" care model. Despite focusing on profitability and operational efficiency in 2024, achieving an EBITDA margin improvement from -19.5% to -4.4%, Kry has continued to integrate assets that complement its core offering.5 The company’s growth in 2024, characterised by an organic increase of 16,000 registered patients in Sweden and adaptation to new regulatory frameworks in France, has been supported by a strategy of consolidating smaller digital and physical care providers.

Strategic Corporate Acquisitions

Traditional corporate acquirers, Medtech and Pharma multinationals, remain active participants in the Series A off-ramp, though their criteria have tightened significantly. The era of speculative, high-valuation acquisitions is over; corporates are now focused on "bolster" deals that fill specific gaps in their R&D pipelines or digital capabilities.

The Medtech Pivot: From Devices to Data

Major Medtech players like Boston Scientific, Stryker and ResMed are actively acquiring digital health and early-stage device companies to transition from pure hardware manufacturers to connected care providers.

ResMed’s Acquisition of Medifox Dan: While a larger deal (€958.6 million), ResMed’s acquisition of the German software provider Medifox Dan serves as a bellwether for the sector. It illustrates the appetite of US strategics to acquire European software assets to expand their SaaS footprints outside the United States. For Series A SaaS companies in the care management space, this signals a clear exit pathway: demonstrating value to a US strategic looking for a European beachhead.
Boston Scientific’s Activity: In early 2025, Boston Scientific acquired Bolt Medical ($443 million upfront) and SoniVie ($400 million upfront), demonstrating a robust appetite for cardiovascular innovation. These deals highlight that for Medtech hardware startups, the "Series A Off-Ramp" often leads directly to a US acquirer once clinical proof-of-concept is established, bypassing the need for a commercialisation-focused Series B.

Pharma’s "String of Pearls" Strategy

In the pharmaceutical sector, M&A activity is driven by the looming patent cliff and the need to replenish pipelines. Pharma companies are adopting a "string of pearls" strategy, acquiring multiple early-to-mid-stage biotech and TechBio companies rather than betting on single mega-mergers.

TechBio Focus: Companies using AI to accelerate drug discovery are commanding significant premiums. The acquisition of Amolyt Pharma by AstraZeneca for $800 million upfront and the merger of Exscientia (UK) with US-based Recursion underscore this trend. For Series A investors in TechBio, the exit timeline is compressing; Pharma is willing to buy the platform and the team earlier in the cycle, rather than waiting for late-stage clinical trial results.

Private Equity’s Descent into the Middle Market

A critical development in 2024 and 2025 is the increasing involvement of private equity (PE) firms in the Series A/B landscape. Traditionally focused on mature, cash-generative buyouts, PE firms are moving downstream to capitalise on depressed valuations and the fragmentation of the European healthtech market.

The "Buy-and-Build" Playbook

PE firms are employing "buy-and-build" strategies, acquiring a "platform" asset and then rolling up smaller Series A competitors to build scale and realise synergies.

Sector Focus: This activity is particularly intense in healthcare services, specialised care (eg. dentistry, ophthalmology), and healthcare IT. In the UK, PE-backed Mysa Care and Potens have acquired smaller specialist care providers, effectively providing an off-ramp for founders of smaller service businesses.
The Valuation Gap: PE buyers are disciplined on price, often valuing companies on EBITDA multiples rather than the revenue multiples typical of VC. This creates a friction point for Series A founders with high valuation expectations from 2021. However, as cash runways dwindle, the certainty of a PE exit, even at a lower valuation, is becoming increasingly attractive compared to the uncertainty of the venture market.

The Distressed Off-Ramp: Insolvency and Administration

For companies unable to secure bridge funding or a strategic buyer, the off-ramp becomes a restructuring process. 2024 witnessed a significant spike in healthtech insolvencies, driven by the withdrawal of "tourist capital" and the harsh reality of unit economics.

Case Study: The Collapse of Babylon Health

The implosion of Babylon Health is the defining insolvency event of the decade for European healthtech. Once valued at over $4 Billion, Babylon’s aggressive expansion into the US and reliance on SPAC capital left it exposed when market sentiment turned.

The Mechanism: Babylon’s US operations filed for Chapter 7 bankruptcy, while its UK business entered administration.
The Outcome: The UK assets, principally the clinically valuable "GP at Hand" service, were sold out of administration to eMed, a US digital health company.
Implications: This was a fire sale, not an exit. Common shareholders were wiped out. However, the transaction preserved the clinical service for patients and provided a home for the technology. It serves as a stark warning to Series A founders: growth without unit economics leads to administration, where founders lose control of the off-ramp destination.

Case Study: Inveox and the German Insolvency Wave

The German market has seen a particular rise in insolvencies, with corporate filings up 23.1% in 2024. Inveox, a celebrated Munich-based pathology startup, filed for insolvency in late 2024 after a financing round collapsed.

Hardware Vulnerability: Inveox’s struggles highlight the specific risks facing hardware-enabled Medtech. High fixed costs and inventory requirements make these companies less agile than software peers.
The Asset Sale: The company was ultimately acquired by an investor out of insolvency, saving the core technology but likely resulting in a total loss for early equity holders. This "asset deal" structure is becoming a common off-ramp mechanism in the DACH region, allowing buyers to acquire IP and talent free of legacy debt liabilities.

The Regulatory Landscape: Catalyst or Barrier?

European regulation acts as both a driver of innovation and a catalyst for consolidation. The complexity of compliance creates a "moat" that protects incumbents but also raises the capital requirements for startups, forcing many to seek an off-ramp rather than attempting to scale independently.

The EU AI Act and Compliance Costs

The implementation of the EU AI Act introduces stringent requirements for "high-risk" AI systems, a category that encompasses many medical devices and diagnostic tools.

The Compliance Burden: Compliance requires rigorous data governance, human oversight, and transparency documentation. For a Series A startup with limited runway, the cost of building this compliance infrastructure can be prohibitive.
M&A Driver: This regulatory burden drives M&A. Large acquirers (Siemens, Philips, GE HealthCare) have established regulatory affairs departments that can absorb these costs. Consequently, startups are incentivised to sell to these platforms rather than attempting to build their own compliance stacks.

Reimbursement Fragmentation: The Scale Problem

Despite initiatives like the European Health Data Space (EHDS) aimed at harmonisation, reimbursement remains fragmented.

Germany (DiGA): The DiGA fast-track for digital health apps has been a pioneering model, but the conversion from "provisional" to "permanent" listing is difficult. Many startups fail to prove the required socioeconomic benefit, leading to delisting or pricing pressure. Startups that stall in the DiGA process are prime targets for consolidation by aggregators who can spread the clinical trial costs across a portfolio of apps.
France (PECAN): France’s PECAN scheme offers a similar fast-track, but the bureaucratic hurdles remain high. The divergence between national systems means a startup must effectively re-launch in every country, requiring a Series B+ balance sheet. For Series A companies, the inability to fund multi-country expansion is a primary trigger for seeking an exit.

Antitrust Scrutiny: The Towercast Effect

While consolidation is a key off-ramp, regulators are increasingly wary of "killer acquisitions." The French Competition Authority’s (FCA) fine of €4.7 million against Doctolib for its acquisition of MonDocteur marks a watershed moment.

Towercast Ruling: The FCA utilised the ECJ’s "Towercast" ruling, which allows competition authorities to review mergers below traditional revenue thresholds if they constitute an abuse of a dominant position.
Chilling Effect: This introduces significant execution risk for V2V exits. Founders and investors must now consider antitrust risk even for relatively small Series A exits if the acquirer is a dominant market player. This may push startups toward selling to non-dominant players (e.g., foreign entrants or PE firms) rather than the obvious local champion.

Regional Deep Dives

The dynamics of the Series A off-ramp vary significantly across Europe’s major tech hubs.

The United Kingdom: Innovation Amidst Constraints

The UK remains the largest recipient of healthtech funding in Europe, capturing $1.37 Billion in H1 2025, but the ecosystem is scarred by the Babylon collapse and NHS structural challenges.

The "Golden Triangle" Resilience: The Oxford-Cambridge-London triangle continues to produce world-class TechBio companies. Healx, utilising AI for rare disease discovery, raised a $47 million Series C in 2024, demonstrating that high-quality assets can still graduate.
US Acquirers: The UK is a primary hunting ground for US acquirers. The sale of Exscientia to Recursion is a prime example of high-value IP exiting to the US.
NHS Procurement: The slow pace of NHS adoption remains a bottleneck. Startups often languish in "pilot purgatory," unable to secure the recurring revenue needed for Series B. The "MedTech Funding Mandate" attempts to accelerate adoption , but for many, the timeline is too slow, making an acquisition by a provider with existing NHS framework access (like Cera Care or System C) a more viable path.

France: The State-Buffered Ecosystem

France has bucked the European downtrend in some respects, driven by aggressive state support via Bpifrance and the "France 2030" plan.

AI Leadership: France has emerged as the European hub for Generative AI in healthcare. Companies like Bioptimus (launched with $35M seed) and Nabla (AI copilot for doctors) are attracting significant capital.
The "Soft Landing": Bpifrance often acts as a stabilizer, participating in bridge rounds or facilitating consolidation to prevent bankruptcies. This creates a "soft" off-ramp where companies are merged rather than liquidated. However, the political instability in late 2024/early 2025 has introduced uncertainty into this state-support model.

DACH Region: The Hard Off-Ramp

Germany, as Europe’s largest healthcare market, is facing a wave of restructuring.

Insolvency as Strategy: The German insolvency code allows for "preliminary self-administration," a mechanism used by companies like Inveox and TubeSolar to restructure debt and find buyers. This process is efficient but brutal for equity holders.
Hospital Crisis: The insolvency of numerous German hospitals (24 filings in 2024) creates downstream pressure on Medtech startups selling to providers. As the customer base consolidates, startups face longer sales cycles and higher counterparty risk, accelerating the need for their own consolidation.

Alternative Liquidity: Secondary Markets and Seedstrapping

Recognising the difficulty of traditional exits, the market is innovating new liquidity mechanisms.

Secondary Market Evolution

Secondary transactions are moving downstream.

Strip Sales: Venture funds are utilising "strip sales" to generate liquidity for their Limited Partners (LPs). Backed VC’s sale of a stake in its portfolio is a case in point. This allows the VC to return cash without forcing a premature exit of the startup, potentially giving the founder more time to grow into a Series B valuation.
Platforms: Platforms like Funderbeam and Seedrs (Republic Europe) are facilitating secondary trading for smaller shareholders, providing a "micro-exit" capability that relieves pressure on the cap table.

"Seedstrapping"

A growing cohort of founders is opting out of the VC treadmill entirely. "Seedstrapping", raising a single seed round and then managing for profitability is becoming a recognised strategy. While not an "off-ramp" in the sense of an exit, it is an off-ramp from the venture trajectory. These companies often become attractive targets for private equity roll-ups later in their lifecycle, as they demonstrate the capital efficiency that PE buyers prize.

Detailed Data Analysis

Notable European Healthtech & Medtech Series A Off-Ramp Events (2023-2025)

Company	Country	Sector	Acquirer / Outcome	Type of Exit	Deal Context / Driver
Babylon Health	UK	Digital Health	eMed (US)	Distressed Asset Sale	Insolvency/Administration. Failed unit economics and public market collapse.
Inveox	Germany	Medtech / Pathology	Undisclosed Investor	Insolvency Sale	Financing failure. Restructuring via preliminary insolvency proceedings.
MonDocteur	France	Booking Platform	Doctolib	M&A (Consolidation)	Strategic consolidation to secure market dominance (subject to FCA fine).
Medifox Dan	Germany	Care Software	ResMed(US)	Strategic Acquisition	€958M deal. US strategic expanding SaaS footprint in Europe.
Exscientia	UK	AI Drug Discovery	Recursion(US)	Strategic Merger	Consolidation of AI drug discovery platforms to create global leader.
Amolyt Pharma	France	Biotech	AstraZeneca	Strategic Acquisition	$800M+ deal. Pharma acquiring rare disease pipeline assets.
Sonio	France	AI Diagnostics	Samsung Medison	Strategic Acquisition	Samsung expanding into AI-driven women's health and ultrasound.
Bolt Medical	Global/EU Ops	Medtech	Boston Scientific	Strategic Acquisition	$443M upfront. Medtech major acquiring cardiovascular innovation.
SoniVie	Israel/EU	Medtech	Boston Scientific	Strategic Acquisition	$400M upfront. Expansion of renal denervation portfolio.

Investment Dynamics: The Series A to B Bottleneck (Q4 2024)

Metric	Trend (YoY)	Implication for Series A Off-Ramp
Series B Invested Capital	-84% vs Q4 2021	Massive capital contraction makes Series B graduation highly improbable for most.
Time Between Rounds (Seed -> A)	774 Days (+84% vs 2021)	Extended runways drain cash reserves, necessitating bridge rounds or early exits.
Median Series A Valuation	$37.4M (+2%)	Valuations holding nominally, but likely structured with high liquidation preferences.
Bridge Round Frequency	~37% of deals	High prevalence of bridges indicates inability to price new rounds ("Bridge to Nowhere").
Series B Dilution	11% (vs 25.5% in 2023)	Low dilution suggests insider-led flat/down rounds rather than competitive external pricing.

Regional Insolvency & Distress Indicators (2024)

Region	Insolvency Trend	Key Healthtech Stressors
Germany (DACH)	+23.1%(High)	High energy costs, hospital sector insolvency crisis reducing customer base, strict DiGA reimbursement hurdles.
France	+17%(Moderate)	End of "cheap money" era, repayment of state-backed loans (PGE), political instability freezing investment decisions.
United Kingdom	Rising	Post-Babylon investor skepticism, NHS budget constraints, lack of growth capital for scaling.

Implications and Outlook for 2025

The "Series A Off-Ramp" is not a temporary anomaly; it is a structural correction that will define the European healthtech landscape for the foreseeable future. The implications are profound for all stakeholders.

For Founders: The Pivot to M&A Readiness

Founders must recognize that Series B is no longer the default next step. Building "M&A readiness" into the company's DNA at the Series A stage is critical. This means:

Clean Data & IP: Ensuring data rooms are due-diligence ready at all times.
Strategic Networking: Cultivating relationships with corporate venture arms (CVCs) of potential acquirers (e.g., Boston Scientific Ventures, ResMed) early in the lifecycle.
Milestone Planning: Structuring bridge rounds to achieve specific value-inflection points that trigger acquisition interest (e.g., FDA clearance or DiGA listing) rather than vague "growth" metrics.

For Investors: Active Portfolio Management

VCs must become active managers of liquidity.

Consolidation: Investors should actively broker mergers between portfolio companies. Combining two sub-scale Series A companies. for example, merging a diagnostics AI with a workflow software provider, can create a single entity with the revenue profile to attract PE buyers or Series B funding.
Secondaries: Utilising secondary markets to sell "strips" of high-performing assets can lock in DPI (Distributed to Paid-In capital) and reduce pressure to force premature exits for the winners.

For Policymakers: Harmonisation as a Growth Driver

The fragmentation of Europe remains its biggest weakness. The V2V consolidation trend is partly a symptom of the difficulty of scaling organically across borders. Policymakers must prioritise the harmonization of reimbursement (a "European DiGA") and data access (EHDS) to create a true single market. Without this, the "off-ramp" to US acquirers will remain the most attractive path for Europe's most promising innovations, resulting in a loss of sovereign capability in critical areas like Health AI.

Conclusion: The New Normal

The "Great Calibration" is painful, characterised by insolvencies and down-rounds. However, it is also a sign of a maturing ecosystem. The weeding out of unviable business models (like the Babylon "growth at all costs" approach) is creating a more resilient sector focused on clinical evidence and sustainable unit economics.

The "Series A Off-Ramp" is the mechanism by which capital and talent are recycled from stalled ventures into the next generation of winners. In 2025, success will be defined not just by the ability to raise the next round, but by the ability to recognise when to take the off-ramp to preserve value.

Nelson Advisors > MedTech and HealthTech M&A

Nelson Advisors specialise in mergers, acquisitions and 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

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