2025?Predictions for Medtech’s Five?Largest Market Segments
This holiday season, LSI 's Market Intelligence team is hard at work.
As we continue serving global healthcare organizations, multinational medtech corporations, venture capital and private equity firms, contract design and manufacturers, and more, many of our clients have the same question...
What will the market look like in 2025?
The highest density of client inquiry has been concentrated in medtech's five largest market segments — in-vitro diagnostics, cardiovascular devices, orthopedics and spine devices, diagnostic imaging, and digital health.
This week, we explore these five segments, the numbers behind their current state and growth, and the trends shaping them in 2025 and beyond.
Looking for deeper data on the markets covered? Get in touch with our team for a free exploratory call.
2024 Medtech Market In Review
In 2024, we saw the "ice thaw" in multiple areas of medtech.
From Q1 to Q3 of 2024, medtech venture activity totaled $16.1 billion across 554 funding rounds. In Q3 2024 alone, venture investments totaled $5.1 billion across 154 rounds, up approximately $1 billion compared to the same period in 2023.
Through Q3 2024, 195 medtech acquisitions totaled $47 billion in value. This compares to FY 2023, when 128 medtech M&A deals were announced, totaling over $50.1 billion.
Initial public offerings began showing signs of life this year. Fractyl Health, Tempus AI, and Ceribell │ AI-Powered Point-of-Care EEG raised over $700 million on NASDAQ and NYSE in 2024. Despite a rocky aftermarket for Fractyl (initially priced at $15 per share but now hovering around $2 per share), there is tremendous optimism following no U.S. medtech IPOs in 2023.
The overall market, valued at $628.0B in 2024 by LSI's Market Intelligence team, is projected to grow to $669.4B in 2025 — posting 6.59% annual growth.
Fun fact — the five largest market segments covered today are projected to account for over half of all medtech revenue generated in 2025.
In-Vitro Diagnostics (IVD): AI-Powered Urinalysis Leads Innovation
The IVD market, set to reach $93.0 billion by 2025, is evolving rapidly, with urinalysis advancements fueling rapid growth.
Urinalysis is emerging as a cornerstone for early detection of kidney and metabolic disorders. We project that advances in AI-powered platforms will continue to enhance accuracy, expand clinical application, and drive adoption in both clinical and at-home settings — further solidifying IVD as a critical solution in modern healthcare.
Additionally, molecular diagnostics continues to post notable growth. We project the subsegment to outpace traditional categories like clinical chemistry, hematology, and immunodiagnostics in total product sales, and become the largest IVD subsegment by total sales in 2025.
Cardiovascular Devices: Transforming Electrophysiology and Revascularization
As innovation in cardiovascular devices continues to redefine the standard of care, we project the market to reach $66.2 billion in 2025.
Pulsed Field Ablation (PFA) has revolutionized atrial fibrillation treatment, setting new standards in safety and efficacy, and demonstrating early evidence of durability compared to traditional methods. Major multinational corporations have pursued organic and inorganic opportunities to develop/in-house PFA technologies for the better part of a decade. In 2025, we predict that all major players will have a commercially-available PFA technology in their portfolio, with 雅培 closing out the pack.
Simultaneously, intravascular lithotripsy is gaining traction for managing calcified lesions, potentially reshaping revascularization strategies as profoundly as PFA has in electrophysiology.
Orthopedics & Spine: Robotics Take Center Stage
With robotic surgical systems at the forefront of the market, we project orthopedics and spine to reach $56.2 billion in 2025.
With innovation in vendor-agnostic systems and bolstered robotics portfolios from major multination corporations, robotic platforms will undoubtedly continue to make advancements towards delivering greater precision in joint replacement and spine procedures, reducing recovery times, and improving outcomes in 2025
As care shifts towards outpatient and minimally invasive approaches, robotics will continue to become an entrenched cornerstone in modern orthopedic care.
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Diagnostic Imaging: AI Drives Accuracy and Efficiency
The diagnostic imaging market, projected at $43 billion in 2025, is in the early innings of an AI-driven transformation that will continue gaining momentum in 2025.
By optimizing imaging workflows, enhancing diagnostic accuracy, and enabling faster throughput, AI-powered tools are addressing critical needs rom cancer detection and neuroimaging.
By alleviating burdens on providers like radiologists, we foresee these tools supporting the prioritization of critical cases, enhancing operational efficiency, and improving system-level outcomes.
Digital Health: Personalized Medicine is Finally Possible
Digital health, projected to reach $44.2 billion in 2025, is reshaping healthcare delivery and enabling the delivery of personalized medicine.
Wearables, remote monitoring tools, and AI-powered analytics will continue enabling personalized treatment approaches. Digital biomarkers are being meaningfully integrated into treatment plans, and virtual care platforms continue to bridge gaps in access to healthcare
Partnerships between medtech firms and tech giants, like Dexcom and ōURA 's partnership to integrate Dexcom glucose data with the Oura Ring's vitals, sleep, stress, heart, and activity data) are accelerating innovation.
Not only do we expect more partnerships like this in 2025, but we project digital health to be the fastest-growing segment next year. By 2026, we project it to surpass diagnostic imaging in market size.
Bonus: Market Subsegments With Outsized Growth
As we approach 2025, LSI’s Market Intelligence team is closely watching innovation and investment in multiple market subsegments that are outpacing the overall medtech market's 6.59% annual growth.
Here is a sneak peak at their projected CAGRs heading into the new year:
Need deeper data on the market segments above? Get in touch with our team for a free exploratory call.
What's Next?
Medtech is entering the next wave of a technological revolution. AI, robotics, and digital health solutions are redefining care, and companies are embracing these technologies across their portfolios and businesses.
The promise is there, but the true impact will depend on how well they are integrated into legacy business models and established enterprises, how challengers in the market collaborate with (or differentiate from) the dominant players, and the quality of evidence generated to support real clinical utility and better patient outcomes.
Don't blink, or you might miss it.
(Okay, you can blink, FDA doesn't move THAT fast)
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Until next week,
Henry Peck and Nick Talamantes
All data in this article is sourced from LSI's Market Intelligence Team
Fantastic summary. I am thrilled to see New Jersey Legacy Companies, Johnson & Johnson and BD leading the charge on innovation acquisition. We are very engaged with #Medtech start-ups here in the Garden State. Happy Holidays!