M&A Deals Rose To A Three-year High In 2024, While Later-Stage VC Investments Climbed – Corporate and Company Law

Medtech mergers and acquisitions (M&A) and venture capital
(VC) showed signs of life in 2024, contributing to an overall
optimistic outlook for the sector this year despite lingering
headwinds.

Strategic investments are expected to continue as medtech
companies innovate, particularly in areas such as AI-driven
diagnostics, wearables and remote monitoring devices, and advanced
surgical technologies.

Private, venture-backed M&A activity for medical
devices—which picked up in the second half of last year and
started 2025 strong with two ten-digit acquisitions and two
spin-offs by strategics—could continue rising amid a more
deregulatory backdrop under the new presidential administration.

Still, challenges persist that could slow growth. Early-stage VC
deals in the sector have faced difficulties, and private M&A
exit timelines have increased. Uncertainty regarding the path of
interest rates and the broader economy also muddy the outlook.

M&A Deal Volume Begins to Pick Up

The number of private, venture-backed M&A deals for medical
devices climbed to 14 in 2024 — up from nine a year earlier
and the highest annual tally since 2021 — according to the
2024 HSBC Venture Healthcare Report. The third quarter of
2024 saw a significant increase in dealmaking following a slow
first half of the year.

Cardiovascular-focused companies ranked first in private M&A
activity, with five deals last year.

In one concerning sign, the typical time to exit from first
financing rose to 11.9 years last year, more than doubling from
2021, per HSBC. Exit timelines have lengthened significantly in
recent years for both 510(k) and PMA-focused companies amid a
challenging capital environment.

Still, medtech M&A activity overall appears to be on an
upward trajectory. Separate figures from JP Morgan show that
medtech companies announced 305 M&A transactions last year, the
second highest count in the past decade, behind 2021. (JP
Morgan’s higher deal count in part reflects its broader
definition of medtech, which includes medical devices, diagnostics,
therapeutic digital health, and commercial research tools.)

Later-Stage Investments Drive VC Activity

Medical device venture investment ticked up to $7.5 billion in
2024 from $6.5 billion in 2023, HSBC’s report showed.
Later-stage financing led by new investors surged, helping offset
weakness in early-stage investments tied to investors’ concerns
about Series B rounds.

A variety of investors — including traditional VC, growth,
private equity, and crossover investors — were attracted to
the lower risks and strong valuation opportunities of later-stage
deals. However, investment was concentrated among a small number of
deals: the top 10% of medical-device deals accounted for more than
half of the sector’s total capital invested, HSBC said.

There was a significant rise last year in venture investment
rounds exceeding $50 million and $100 million, according to JP
Morgan, reflecting a shift toward larger, more selective
investments in companies with high growth potential.

Companies specializing in non-invasive monitoring (NIM),
orthopedic, and vascular attracted more investment in 2024 than in
2023, while those focusing on cardiovascular and neurology remained
stable. Investment in imaging — which has fluctuated in
recent years — declined, HSBC noted.

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