Blog

Businessman analyzes the graph of trend market growth in 2025 and plans business growth and profit increase in the year 2025. plan finances of the business

In healthtech M&amp;A in 2025, earn-outs are increasingly common and are being used to bridge valuation gaps between buyers and sellers, mitigate risk, and align incentives. The use of these structures is particularly prevalent for high-growth, early-stage companies and those with unproven or developing technologies, such as AI-driven platforms and digital therapeutics.&nbsp;Key Trends and Structures 🤝 Risk-Sharing Mechanism: Earn-outs are a way for buyers to manage the risk of overpaying for a company with unproven technology or an uncertain future revenue stream. They allow the buyer to pay a lower upfront price and a contingent, future payment if the business hits agreed-upon performance metrics. Contingent on Performance: Payments are tied to specific, measurable milestones. These milestones can be financial, like achieving a certain revenue or adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), or non-financial, such as receiving regulatory approval (e.g., FDA clearance), launching a new product, or hitting specific customer acquisition targets. Typical Metrics: While revenue and adjusted EBITDA are standard, healthtech deals often incorporate milestone-driven metrics due to the nature of the industry. This is particularly true for biopharma and diagnostics companies, where a deal might be structured with an initial payment and an earn-out tied to a clinical trial's success, regulatory approval, or a product's commercial launch. Earn-out Period and Percentage: Earn-out periods typically range from one to three years to allow sufficient time for the acquired company to achieve the agreed-upon milestones. The contingent portion of the total deal value can vary widely, but for a seller's business that is already generating revenue, the earn-out may constitute 10-20% of the total purchase price. Market Dynamics in 2025 📈 The healthtech M&amp;A market in 2025 is driven by several factors, which influence the use and structure of earn-outs:AI Integration: Companies with proprietary AI algorithms and scalable platforms are commanding higher valuations, often seeing multiples of 6-8x revenue, above the sector average of 4-6x. Earn-outs are used to justify these premiums by tying a portion of the valuation to the successful commercialization and integration of the AI technology. Regulatory Evolution: As regulatory bodies like the FDA refine their frameworks for digital health tools, clear regulatory pathways boost buyer confidence. However, for companies still navigating this uncertainty, earn-outs are a crucial tool to manage risk, with payments contingent on achieving regulatory milestones. Shift to Value-Based Care: Buyers are increasingly interested in healthtech that delivers measurable cost savings and improved patient outcomes. Companies with platforms enabling this shift (e.g., remote monitoring, population health analytics) attract a premium, and earn-outs are used to ensure the technology delivers on its promised value.To discuss how Nelson Advisors can help your HealthTech, MedTech, Health AI or Digital Health company, please email <a data-mce-href="mailto:lloyd@nelsonadvisors.co.uk" href="mailto:lloyd@nelsonadvisors.co.uk" title="lloyd@nelsonadvisors.co.uk" target="_blank" rel="noopener">lloyd@nelsonadvisors.co.uk</a>

HealthTech M&A Earn Outs: Key Trends, Structures and Market Dynamics in 2025

Nelson Advisors partner Lloyd Price has been invited to judge the MedTech Startup Pitch Awards at MedTech Europe 2025 taking place in Malta, November 12th to 14th 2025.MedTech Malta 2025 &nbsp;&nbsp; The MedTech Malta 2025 event is a three-day summit scheduled to take place from November 12-14, 2025, at the Mediterranean Conference Centre in Valletta, Malta. 🇲🇹 &nbsp; What to Expect at MedTech Malta 2025 &nbsp;&nbsp; The conference is a convergence point for a global audience, including investors, entrepreneurs and healthcare leaders. It aims to foster collaboration and showcase the latest advancements in medical technology. The agenda includes: &nbsp;&nbsp; Panel Discussions &amp; Keynotes: featuring experts from various fields within the MedTech ecosystem. Startup Pitch Competitions: offering a platform for emerging companies to showcase their innovations. Exhibitions: with a focus on cutting-edge technologies. Networking Opportunities: including exclusive forums for CEOs and investors. Cultural Activities &amp; Awards Gala: the event is set against the backdrop of Malta's historic capital, with a cultural tour and the prestigious MedTech World Awards Ceremony. &nbsp;&nbsp; The conference is a CPD-accredited event, providing healthcare professionals with an opportunity for professional development. <a data-mce-href="https://med-tech.world/malta/" href="https://med-tech.world/malta/" title="https://med-tech.world/malta/" target="_blank" rel="noopener">https://med-tech.world/malta/</a> European Venture Capital and Private Equity Funds &nbsp;&nbsp; MedTech Malta 2025 will feature over 250 investors and 300 speakers, with 25% of attendees coming from the UK and Europe including: &nbsp;&nbsp; Ken Nelson: A partner at MedTech Advantage Fund with a focus on digital health.Diana Saraceni: Co-Founder and General Partner at Panakes, a venture capital firm that invests in early-stage life sciences companies, primarily in Europe and the U.S.Rachna Dayal: An executive with experience at Philips, Johnson &amp; Johnson, and in venture capital.Greg Madden: A Managing Partner at SV Health Investors, a private investment firm focused on health.The event is designed to facilitate connections and collaboration among various stakeholders in the MedTech ecosystem, with a focus on discussions about capital formation in MedTech, including strategies for early-stage investments and cross-border growth. The MedTech Malta Startup Pitch The MedTech Malta Startup Pitch is a platform for medical technology startups to showcase their innovative products, services, and solutions to a panel of judges and potential investors. This shall provide a unique opportunity for entrepreneurs to gain exposure, receive feedback, and secure funding for their ventures.&nbsp; &nbsp;&nbsp; The event attracts a diverse audience of industry experts, healthcare professionals, investors, and entrepreneurs from around the world. The competition is highly competitive, and the judges evaluate each pitch based on its novelty, feasibility, market potential, and overall impact on healthcare. Top performers receive recognition, networking opportunities, and valuable support to advance their business. &nbsp;&nbsp; Source: <a data-mce-href="https://med-tech.world/malta/pitch/" href="https://med-tech.world/malta/pitch/" title="https://med-tech.world/malta/pitch/" target="_blank" rel="noopener">https://med-tech.world/malta/pitch/</a>

Nelson Advisors invited to Judge the MedTech Startup Pitch Awards at MedTech Europe 2025

Portrait of two African American healthcare professionals in blue scrubs

A breakthrough year for nurse-led innovation in AI is projected for 2026 due to several key factors converging, including the increasing maturity of AI tools, a critical need for solutions to nurse burnout and staff shortages, and a growing recognition of nurses' unique position as leaders in healthcare technology. Nurses are not just end-users of AI; they are becoming crucial developers and implementers. Their clinical expertise and deep understanding of patient care workflows are essential for creating AI tools that are truly effective, ethical, and safe.&nbsp; Key Drivers of Nurse-Led AI Innovation in 20261. Addressing the Nursing Crisis 🩺 The healthcare industry continues to face a critical nursing shortage and high rates of burnout. By 2026, AI is expected to become a vital part of the solution. AI-powered tools can significantly reduce administrative burdens for nurses, such as automating documentation, charting, and scheduling. This frees up their time to focus on direct patient care, which is the most valuable and rewarding part of their job. Nurse-led innovation in this area ensures that the tools being developed genuinely meet the needs of frontline staff, leading to higher adoption rates and better outcomes.&nbsp; 2. Maturation of AI and EHR Integration 🤖 By 2026, AI technology, particularly large language models (LLMs) and predictive analytics, will have advanced to a point where it can be seamlessly integrated into existing Electronic Health Record (EHR) systems. This is a crucial step for widespread adoption. As major EHR vendors release more sophisticated AI tools, nurses will have a solid foundation to build upon. They can use their clinical knowledge to fine-tune these systems, ensuring the AI provides contextual and clinically relevant recommendations rather than generic, disruptive alerts.3. Nurses as "Digital Health" Leaders 👩‍💻 The role of a nurse is already evolving to include digital health. Nurses are at the forefront of implementing telehealth, remote patient monitoring, and other digital tools. This experience positions them perfectly to lead AI projects. They have a unique perspective on patient needs and the realities of clinical workflows, which is vital for designing user-friendly and effective AI applications. Nursing education programs are also beginning to incorporate training on AI literacy and data science, empowering a new generation of nurses to become innovators and collaborators in technology development.Opportunities and Challenges Opportunities ✨ Enhanced Clinical Decision Support: Nurse-led AI can provide real-time, personalized recommendations for care plans, medication management, and early warning signs of patient deterioration, helping to improve patient safety and outcomes.Personalised Patient Care: AI can analyze patient data to create tailored treatment plans and educational materials, which nurses can then use to empower patients in their own health journey.New Career Paths: The integration of AI will create new roles for nurses in informatics, data science, and AI implementation strategy, offering opportunities for professional growth and leadership.Challenges 🚧 Ethical Concerns: Nurses must be involved in addressing ethical questions, such as algorithmic bias and accountability for AI-driven errors. Their role as patient advocates is crucial to ensuring AI is used equitably.Training and Adoption: Successfully integrating AI requires adequate training for the nursing workforce. Without proper education and support, there may be resistance to adopting new technologies.&nbsp;Data Quality and Interoperability: AI models are only as good as the data they are trained on. Challenges with inconsistent or incomplete data across different healthcare systems could hinder the development of effective AI tools.To discuss how Nelson Advisors can help your HealthTech, MedTech, Health AI or Digital Health company, please email <a data-mce-href="mailto:lloyd@nelsonadvisors.co.uk" href="mailto:lloyd@nelsonadvisors.co.uk" title="lloyd@nelsonadvisors.co.uk" target="_blank" rel="noopener" data-mce-selected="inline-boundary">lloyd@nelsonadvisors.co.uk</a>

2026 predicted to be a breakthrough year for Nurse led Innovation in Healthcare AI

Subconscious vibro-tactile stimulation is a type of sensory input where vibrations are used to influence the body and brain, but the vibrations are either too subtle to be consciously perceived, or their effect is processed by the brain's subconscious systems rather than our conscious awareness. This stimulation is distinct from typical haptic feedback, which is designed to be felt directly and consciously.This method works by engaging the body's somatosensory system, which includes nerves and receptors in the skin and muscles that detect touch, pressure, and vibration. By providing a continuous, low-level stream of this feedback, the brain is given additional information to process, which it can use to improve balance, motor control, or sensory perception without the individual having to actively think about it.Key ApplicationsBalance and Mobility Improvement: This is one of the most significant applications. For individuals with balance disorders like bilateral vestibulopathy (a condition affecting the inner ear's balance organs), a specialised belt with small vibrators can be worn around the waist. These vibrators provide subtle cues about the person's body sway, which the brain's subconscious processes and uses to make micro-adjustments to posture, significantly reducing the risk of falls and improving mobility. Sensory Substitution: The technology can be used to help individuals who have lost one sense to "perceive" the world through another. For example, some devices translate auditory or visual information into patterns of vibration on the skin. Over time, the brain's neuroplasticity allows it to learn to interpret these tactile patterns as if they were a sound or an image, effectively "rewiring" the brain. Rehabilitation and Stroke Recovery: Subconscious vibro-tactile stimulation has been shown to assist in motor recovery for stroke patients. By applying vibrations to a limb, the stimulation can enhance sensory feedback and promote neural reorganization in the brain, helping to reduce spasticity and improve motor function. Stress Reduction and Neurostimulation: Research into vibroacoustic therapy suggests that low-frequency vibrations can influence the autonomic nervous system. This can lead to increased parasympathetic activity, promoting a state of calm and relaxation without conscious effort from the user. There is also emerging research on using vibrotactile stimulation to non-invasively entrain specific brainwave frequencies, such as gamma oscillations, which is being explored as a potential treatment for conditions like Alzheimer's disease.To discuss how Nelson Advisors can help your HealthTech, MedTech, Health AI or Digital Health company, please email <a data-mce-href="mailto:lloyd@nelsonadvisors.co.uk" href="mailto:lloyd@nelsonadvisors.co.uk" title="lloyd@nelsonadvisors.co.uk" target="_blank" rel="noopener" data-mce-selected="inline-boundary">lloyd@nelsonadvisors.co.uk</a>

Subconscious vibro-tactile stimulation: HealthTech to watch in 2026

Concept of leadership, Red plane flies away from group towards target on black background, achieving goals, Success, Risk management, innovative ideas and innovative business ideas.

MedTech M&amp;A valuation multiples in the second half of 2025 are being shaped by a complex interplay of technological innovation, financial market dynamics, and strategic imperatives. While average multiples for the sector may fluctuate, certain key variables are consistently driving premium valuations for specific companies.Here are 10 key variables driving MedTech M&amp;A valuation multiples in H2 2025:1) AI Integration and Innovation: This is arguably the single biggest driver of valuation premiums. Companies with proprietary, clinically validated AI algorithms for diagnostics, predictive analytics, or patient care are commanding significantly higher multiples. Buyers are paying a premium for technologies that can streamline workflows, improve efficiency, and deliver measurable clinical outcomes, especially when these solutions are deeply integrated into existing healthcare systems. 2) Shift to Value-Based Care: The ongoing transition from fee-for-service to value-based care models is a powerful valuation driver. MedTech companies that provide solutions enabling this shift—such as remote patient monitoring, population health analytics, and platforms that demonstrate cost savings—are highly attractive to buyers like insurers and health systems, leading to higher valuations. 3) Intellectual Property (IP) Portfolio: A robust and defensible IP portfolio, including patents and proprietary technology, provides a significant competitive advantage. Companies with strong IP are seen as less risky and are highly sought after, as their technology is difficult to replicate. This "moat" around the business can directly translate into a higher valuation multiple. 4) Financial Health and Growth Profile: Beyond just revenue, the quality of a company's financials is under scrutiny. Higher multiples are awarded to companies with a strong, sustainable revenue growth trajectory, high gross margins, and a significant percentage of recurring revenue. Buyers are willing to pay more for businesses with predictable and durable cash flows. 5) Strategic Fit and "String of Pearls" M&amp;A: Large MedTech and biopharma companies are actively pursuing a "string of pearls" acquisition strategy, acquiring smaller, innovative companies to fill strategic gaps, enhance core platforms, and expand their product pipelines. A company that aligns perfectly with a larger player's strategic growth plan can fetch a premium valuation due to the potential for immediate synergy and market consolidation. 6) Regulatory Clarity and Compliance: A maturing and clearer regulatory environment, particularly for digital health tools and AI, is boosting investor confidence. Companies with a strong track record of navigating complex regulatory pathways (e.g., FDA or EU approvals) are seen as less risky, which can lift their valuation multiples. Conversely, regulatory uncertainty can deter deals or cap valuations. 7) Specialisation in High-Growth Sub-sectors: Valuations can vary widely by sub-sector. Companies operating in high-growth, specialized areas such as robotics, advanced surgical solutions, ophthalmology, and cardiovascular devices are seeing strong interest and higher multiples. These niche markets are often less crowded and offer significant growth potential. 8) Capital Availability and Private Equity Activity: The significant amount of "dry powder" (unspent capital) from private equity firms, coupled with the robust financial reserves of large-cap companies, is fueling competition for desirable assets. This abundance of capital is leading to bidding wars and, consequently, inflating valuations for companies with strong fundamentals. 9) Data Monetisation and Interoperability: In an increasingly connected healthcare ecosystem, the ability to leverage patient data ethically and efficiently is a key value driver. Companies with clean, actionable data and solutions that enable seamless interoperability with electronic health records (EHRs) are highly valued as they can provide critical insights and create "workflow lock-in." 10) Global and Geographic Expansion Potential: Buyers are increasingly looking for companies that offer a clear path to market expansion, either by accessing new geographies or by having a proven model that can be scaled internationally. Companies that have demonstrated success in a particular market and have a strategy to enter new ones are more attractive, which can boost their valuation.To discuss how Nelson Advisors can help your HealthTech, MedTech, Health AI or Digital Health company, please email <a data-mce-href="mailto:lloyd@nelsonadvisors.co.uk" href="mailto:lloyd@nelsonadvisors.co.uk" title="lloyd@nelsonadvisors.co.uk" target="_blank" rel="noopener">lloyd@nelsonadvisors.co.uk</a>

10 Key Variables driving MedTech M&A valuation multiples in H2 2025

TIME has released its inaugural "World's Top HealthTech Companies 2025" list, in partnership with Statista. The ranking highlights 400 companies from over 25 countries across six market segments. The companies were evaluated based on a combination of financial performance, reputation analysis, and online engagement. &nbsp;&nbsp; 24 UK HealthTech Companies Named In TIME's 'World's Top HealthTech Companies of 2025' Huma Limbic Ally&nbsp; Cera Caristo Diagnostics Cydar Medical Hexarad Skin Analytics Lumeon Semble Open Medical Pando Unity Accurx Birdie Closed Loop Medicine Hero Health Scan.com Fundamental XR BioBeats (a Huma company) hymia Peppy Proximie Itecho Health TIME World's Top HealthTech Companies 2025 Methodology &nbsp; The "TIME World's Top HealthTech Companies 2025" list, created in partnership with Statista, is based on a comprehensive methodology that evaluates companies on three key dimensions: Financial Performance, Reputation Analysis, and Online Engagement. &nbsp;&nbsp; 1. Financial Performance This dimension, which accounts for 50% of a company's total score, assesses a company's financial stability, growth potential, and operational efficiency. The evaluation is based on a mix of data sources, including: &nbsp;&nbsp; Company-submitted data via an application form. Information from the HolonIQ 1 platform. Extensive desk research. &nbsp;&nbsp; The analysis focuses on metrics like revenue, number of employees, and total disclosed funding. These are used to calculate normalized ratios to ensure a fair comparison. &nbsp;&nbsp; 2. Reputation Analysis &nbsp;&nbsp; This dimension, contributing 30% to the total score, evaluates public perception of the companies and their digital health solutions. It uses "social listening" techniques to analyze publicly available content from a variety of sources, including: &nbsp;&nbsp; News coverage Blogs Forums Social media activity &nbsp;&nbsp; The analysis focuses on a company's visibility, credibility, and sentiment, which are crucial for building trust with customers, healthcare providers, and investors. &nbsp;&nbsp; 3. Online Engagement &nbsp;&nbsp; Making up the final 20% of the total score, this dimension measures a company's digital reach and user interaction. The primary metric used is website traffic, which is analyzed over a 24-month period to determine both absolute and relative growth. This metric helps assess real-world usage, user retention, and how effectively companies are engaging with their online audience. &nbsp;&nbsp; The final list of 400 companies is a result of a scoring model that consolidates and weights the data from these three dimensions. The companies are not ranked numerically from 1 to 400, but rather categorized with "Outstanding," "Very High," or "High" performance indicators. &nbsp;&nbsp; TIME World's Top HealthTech Companies 2025 &nbsp; <a data-mce-href="https://time.com/7318020/worlds-top-healthtech-companies-2025/" href="https://time.com/7318020/worlds-top-healthtech-companies-2025/" title="https://time.com/7318020/worlds-top-healthtech-companies-2025/" target="_blank" rel="noopener" data-mce-selected="inline-boundary">https://time.com/7318020/worlds-top-healthtech-companies-2025/</a>

Nelson Advisors

Blog

HealthTech M&A Earn Outs: Key Trends, Structures and Mark...

Nelson Advisors invited to Judge the MedTech Startup Pitc...

2026 predicted to be a breakthrough year for Nurse led In...

Subconscious vibro-tactile stimulation: HealthTech to wat...

10 Key Variables driving MedTech M&A valuation multiples ...

24 UK HealthTech Companies Named In TIME's 'World's Top H...