13 Mar 2023

Health and WellTech – the year ahead

As our latest report shows, M&A activity in this sector has gathered significant pace, as structural spending within the sector drives growth. We expect to see further consolidation throughout 2023 as the market continues to adopt digital and larger end-to-end players continue their consolidation paths.

Read our report for more insight

Whether you are a Health and WellTech company looking to explore strategic options for your business, or an investor/strategic buyer looking for advice on evaluating and financing an acquisition in the Health and WellTech market, Investec can help by providing buy-side or sell-side advice, raising investment from private equity/venture capital or via an IPO.

Investec Health and WellTech Sector Report

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After a standout year in 2021, both M&A and fundraising activity slowed in 2022. Total transaction value declined at a reduced rate to total volume, driven largely by a rise in the number of later stage fundraises, meaning median deal value continued to rise.

“Niche” sub-sectors which were less prevalent 5 years ago, such as self care and mental health, are among the fastest growing in 2022, as mindsets shift from reactive treatments to proactive self care.

self care and mental health among the fastest growing sub sectors chart

Over the same period, the number of transactions in the five fastest growing sub-sectors rose by 300% between 2018 and 2022.

Structural spending across the Health and WellTech landscape – particularly spending on HealthTech contracts by the public sector – is driving market growth across the UK and Europe alike.

Between 2020 and 2021, there was a 95% increase in spending on healthcare software contracts by the public sector.

increase in spend on HealthTech software in the uk

Which areas will see the greatest investment in the medium term?

Hospitals and primary care will continue to enjoy the largest share of investment in private markets, while self care, dental care, mental health, oncology and pharma will continue on their high growth paths.

Telemedicine, appointment-booking software and AI will evolve further, as will investment in new drug discovery and healthcare billing.