HealthTech Roll-Up Strategies continue to build momentum in 2024

Exec Summary:

Rollup strategies continue to play a significant role in shaping the HealthTech landscape in 2024. Acquiring multiple smaller companies within a specific sector and consolidating them into a larger, more unified entity appeals to both larger 'build and buy' organisations and smaller more opportunistic players looking to increase their market share and consolidate the market.

Young, innovative companies often possess cutting-edge technologies and solutions that can be highly valuable to rollup companies. As rollups seek to consolidate their market positions and expand their offerings, they will increasingly turn to startups and scaleups for these valuable assets.

Rollup strategies in healthtech have several benefits, including:

Increased Scale and Efficiency: By combining resources and expertise, rollups can achieve greater economies of scale, leading to improved operational efficiency and reduced costs.

Enhanced Market Reach and Brand Recognition: Larger, more established rollups gain broader market reach and recognition, making them more attractive to customers, partners, and investors.

Diversified Product Offerings and Revenue Streams: Rollups can expand their product portfolio and revenue streams by incorporating the offerings of acquired companies, reducing their reliance on a single product or service.

Accelerated Innovation and Growth: Rollups can leverage the collective knowledge and expertise of acquired companies to accelerate innovation and drive faster growth.

In the context of HealthTech, rollup strategies are particularly appealing due to the industry's fragmented nature, with numerous small, niche players operating in various subsectors. By consolidating these companies, rollups can create comprehensive platforms that address a wider range of healthcare needs, catering to a broader customer base.

Here are some specific examples of rollup strategies likely to impact HealthTech in 2024:

Virtual Care Platforms: Rollups can aggregate telemedicine, remote patient monitoring, and virtual behavioral health companies to establish comprehensive virtual care platforms that provide seamless and coordinated care across various healthcare settings.

Mental Health and Wellness Platforms: Rollups can combine companies offering therapy, counseling, mindfulness apps, and digital therapeutics to create holistic mental health and wellness platforms that address the growing demand for mental healthcare.

Digital Health Data Platforms: Rollups can integrate companies specializing in electronic health records (EHRs), patient data analytics, and clinical decision support tools to develop integrated data platforms that improve patient care and outcomes.

Precision Medicine Platforms: Rollups can bring together companies focused on genetic testing, personalised medicine, and data analytics to create precision medicine platforms that tailor treatment plans to individual patients' genetic and molecular profiles.

As rollup strategies gain traction in HealthTech, we can expect to see the emergence of dominant players in various subsectors. These rollups will reshape the competitive landscape, driving innovation, improving patient care, and influencing the future of healthcare delivery.

Nelson Advisors work with Founders, Owners and Investors to assess whether they should 'Build, Buy, Partner or Sell' in order to maximise shareholder value.

HealthTech M&A - Buy Side, Sell Side, Growth & Strategy services for companies in Europe, Middle East and Africa. Visit www.nelsonadvisors.co.uk

HealthTech M&A Newsletter from Nelson Advisors - HealthTech, Health IT, Digital Health Insights and Analysis. Subscribe Today! https://lnkd.in/e5hTp_xb

HealthTech Corporate Development - Buy Side, Sell Side, Growth & Strategy services for Founders, Owners and Investors. Email [email protected]

Healthcare Technology Thought Leadership from Nelson Advisors – Market Insights, Analysis & Predictions. Visit https://www.healthcare.digital/

Rollups can create comprehensive HealthTech platforms

A healthtech platform is a software application or website that uses technology to deliver healthcare services or products. These platforms can be used for a wide range of purposes, including:

• Connecting patients with providers: Healthtech platforms can make it easier for patients to find and connect with healthcare providers, such as doctors, nurses, and therapists. This can be done through online directories, scheduling tools, and telemedicine services.

• Providing access to health information: Healthtech platforms can provide patients with access to a wealth of health information, including medical records, educational resources, and personalized health assessments. This can help patients make informed decisions about their care.

• Managing chronic conditions: Healthtech platforms can help patients manage chronic conditions, such as diabetes or heart disease. This can be done through self-monitoring tools, medication reminders, and data sharing with providers.

• Supporting clinical decision-making: Healthtech platforms can provide clinicians with tools and data to support their decision-making. This can include electronic health records, clinical decision support systems, and data analytics tools.

Healthtech platforms are a rapidly growing area of healthcare, and they have the potential to revolutionise the way that healthcare is delivered. By leveraging technology, healthtech platforms can make healthcare more accessible, convenient, and effective for everyone.

Here are some examples of healthtech platforms:

• Zocdoc: Zocdoc is an online platform that allows patients to find and book appointments with healthcare providers.

• WebMD: WebMD is a website that provides patients with access to health information, including medical news, articles, and tools.

• 23andMe: 23andMe is a genetic testing company that provides patients with information about their ancestry and health risks.

• Fitbit: Fitbit is a wearable device that tracks patients' activity, heart rate, and sleep.

StartUps and ScaleUps possess IP, technology and methodology which is highly valuable

Young, innovative companies often possess cutting-edge technologies and solutions that can be highly valuable to rollup companies. As rollups seek to consolidate their market positions and expand their offerings, they will increasingly turn to startups for these valuable assets.

Here are some of the specific ways in which startups are likely to contribute to healthtech rollup strategies in 2024:

Technology Acquisition: Rollup companies may acquire startups to gain access to their proprietary technologies. These technologies could be used to develop new products, services, or platforms, or to enhance the capabilities of existing offerings.

Talent Acquisition: Startups often attract and retain top talent in the healthtech industry. Rollup companies may acquire startups to gain access to this talent pool and bolster their own innovation and development capabilities.

Market Entry: Startups can provide rollup companies with a foothold in new markets or customer segments. By acquiring startups, rollups can quickly expand their reach and broaden their customer base.

Proof of Concept: Startups can provide rollup companies with a proof of concept for new technologies or business models. Once a startup has demonstrated the viability of its approach, a rollup company can acquire it and scale the solution more broadly.

Pipeline of Innovation: Startups can serve as a pipeline of innovation for rollup companies. By maintaining relationships with startups, rollups can gain early access to new technologies and trends, allowing them to stay ahead of the competition.

Overall, startups are expected to play a critical role in the healthtech rollup landscape in 2024. Their innovative technologies, talented teams, and access to new markets make them highly attractive partners for rollup companies seeking to expand and grow.

As the rollup trend continues to gain momentum, startups are well-positioned to capitalize on these opportunities and make significant contributions to the future of healthtech.

Private Equity rollup strategies in HealthTech to focus on the 'Forgotten MidTier'

Private equity firms have traditionally focused on investing in large, high-growth healthcare technology companies. However, there is a growing opportunity for private equity firms to tap into the midtier of the healthtech landscape.

These midtier companies have demonstrated a proof of concept, have won flagship customers, and are consistently profitable. However, they are unlikely to reach billion-dollar valuations. This makes them attractive targets for private equity firms that are looking for companies with the potential for double-digit growth.

The healthcare technology (healthtech) industry is vast and growing, with a wide range of companies at different stages of development. Private equity firms have traditionally focused on investing in the largest and most well-known healthtech companies, such as those that have achieved unicorn status. However, there is a growing opportunity for private equity firms to invest in the midtier of the healthtech landscape.

Some of the benefits of investing in midtier healthtech companies include:

• Lower risk: Midtier healthtech companies are less likely to fail than the largest healthtech companies. This is because they have already demonstrated a proof of concept and have won flagship customers.

• Double-digit growth: Midtier healthtech companies have the potential for double-digit growth. This is because they are still in the early stages of their development and have a lot of room to grow.

• Expertise: Private equity firms can bring their expertise to help midtier healthtech companies scale and grow. This can include providing access to capital, strategic guidance, and operational support.

Some of the challenges of investing in midtier healthtech companies include:

• Competition: The midtier healthtech landscape is becoming increasingly competitive. This is because there are more and more companies vying for a share of the market.

• Regulation: The healthcare industry is highly regulated. This can make it difficult for midtier healthtech companies to navigate the regulatory landscape.

• Exit: There are fewer potential buyers for midtier healthtech companies than for larger companies. This can make it difficult for private equity firms to exit their investments.

Overall, there is a growing opportunity for private equity firms to invest in the midtier of the healthtech landscape. These companies offer the potential for double-digit growth with a lower risk profile than the largest healthtech companies. However, there are also some challenges that private equity firms need to be aware of, such as competition and regulation.

Blockbuster healthtech rollup strategies expected to make a big impact in 2024

Here are some of the blockbuster healthtech rollup strategies that are expected to make a big impact in 2024:

1. Mental health:

Mental health is one of the most promising areas for healthtech rollups in 2024. The market for mental health services is expected to reach $200 billion by 2025, and there is a growing demand for digital solutions that can provide affordable and accessible care. Rollup companies can acquire startups that are developing innovative mental health apps, teletherapy platforms, and other digital tools to create a comprehensive mental health platform.

2. Telehealth:

Telehealth is another area that is ripe for rollup activity in 2024. The telehealth market is expected to reach $285 billion by 2026, and there is a growing demand for virtual care solutions that can provide patients with convenient and affordable access to medical services. Rollup companies can acquire startups that are developing telehealth platforms for specific specialties, such as dermatology, cardiology, and oncology, to create a comprehensive telehealth platform.

3. Wearables:

The wearables market is expected to reach $80 billion by 2025, and there is a growing demand for devices that can track health data and provide insights into users' health and fitness. Rollup companies can acquire startups that are developing innovative wearables with new sensors and features, such as continuous glucose monitoring and ECG tracking, to create a comprehensive wearables platform.

4. Artificial intelligence (AI):

AI is being used in a variety of ways to transform healthcare, and rollup companies are well-positioned to capitalize on this trend. Rollup companies can acquire startups that are developing AI-powered solutions for drug discovery, clinical decision support, and patient monitoring to create a comprehensive AI-powered healthcare platform.

5. Data analytics:

Data analytics is essential for understanding and improving healthcare. Rollup companies can acquire startups that are developing data analytics platforms to help healthcare providers collect, analyze, and use healthcare data to improve patient care and outcomes.

These are just a few of the blockbuster healthtech rollup strategies that are expected to make a big impact in 2024. As technology continues to advance, we can expect to see even more innovative and transformative healthtech rollups emerge in the years to come.

Nelson Advisors work with Founders, Owners and Investors to assess whether they should 'Build, Buy, Partner or Sell' in order to maximise shareholder value.

?

HealthTech M&A - Buy Side, Sell Side, Growth & Strategy services for companies in Europe, Middle East and Africa. Visit www.nelsonadvisors.co.uk

?

HealthTech M&A Newsletter from Nelson Advisors - HealthTech, Health IT, Digital Health Insights and Analysis. Subscribe Today! https://lnkd.in/e5hTp_xb

?

HealthTech Corporate Development - Buy Side, Sell Side, Growth & Strategy services for Founders, Owners and Investors. Email [email protected]

?

Healthcare Technology Thought Leadership from Nelson Advisors – Market Insights, Analysis & Predictions. Visit https://www.healthcare.digital/