Key takeaways from Nelson Advisors 2025 year in review

The core takeaways are that 2025 was a “flight to quality” year in European HealthTech, with fewer but larger, AI‑centric and value‑driven deals, elevated break rates, and a clear premium for proven, compliant, scalable platforms.​

Market structure and exits

European HealthTech M&A shifted from speculative volume to selective, higher‑value transactions, with deal value rising even as overall exit volumes remained subdued.​

M&A remained the dominant exit route, and consolidation accelerated particularly in fragmented MedTech and device sub‑segments where scale, integration and data are critical.​

“Flight to quality” and AI premium

Capital and acquirers concentrated on assets with defensible AI, strong unit economics, and clear clinical and economic outcomes, moving away from “growth at all costs” and thin AI wrappers.​

Nelson Advisors highlights a pivot to “selective scale” and “defensible AI pipelines,” with AI investment and M&A targeting platforms that can be deployed system‑wide rather than pilot‑level tools.​

Valuations, broken deals and distress

Multiples in 2025 stabilised in a mid‑single‑digit ARR band for most HealthTech targets, with meaningful premium bands for profitable, AI‑native and infrastructure assets.​

Deal‑break analyses show that transactions failed less due to lack of buyer appetite and more because of valuation gaps, diligence‑driven concerns (quality systems, unit economics, compliance), and misaligned strategic rationale.​

Policy, data and infrastructure tailwinds

EU‑level initiatives such as the European Health Data Space and a prospective “Data Unlock” under a Digital Omnibus package are seen as structural tailwinds, easing secondary use of health data and supporting AI training and deployment.​

Nelson Advisors frames public‑sector funding plus EU policy as creating a comparatively predictable regulatory and reimbursement environment, making Europe an attractive region for AI‑enabled HealthTech and MedTech growth.​

Implications for founders and investors

For founders, the 2025 lesson is to prioritise regulatory‑ready, interoperable, AI‑enabled products with clear ROI, robust quality systems, and credible paths to profitability to command premium valuations and reduce execution risk.​

For investors and acquirers, the focus shifts to platform AI, infrastructure, and buy‑and‑build in fragmented niches, with distressed and sub‑scale assets providing selective opportunity where technology and data are strong but balance sheets are weak.

To discuss how Nelson Advisors can help your HealthTech, MedTech, Health AI or Digital Health company, please email [email protected]