Market Overview and Recent M&A Trends (2017�2024)
From Å·²©ÌåÓýƽ̨ late 2010s through 2021, mergers and acquisitions in healthcare SaaS and Å·²©ÌåÓýƽ̨ broader health IT sector climbed to record levels, reflecting a global boom in digital health investment.
This surge was likely driven by pressures during Å·²©ÌåÓýƽ̨ pandemic, like Å·²©ÌåÓýƽ̨ urgent need for virtual care and digital tools, along with a favorable market, including low interest rates and strong stock markets. 2021 turned into a record year for healthcare tech deals, with an unusually high number of transactions and valuations.
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After peaking and remaining steady through 2021â€�2022, Å·²©ÌåÓýƽ̨ trend began to shift. Rising geopolitical and economic headwinds â€� high inflation, interest rate hikes, and stock volatility â€� coupled with tougher regulatory scrutiny â€�.
After years of growth, European healthcare SaaS deal activity declined significantly in 2024: dropping by approximately 29% compared to 2021.
This mirrors global trends across healthcare and life sciences more broadly: deal activity in 2024 remained subdued, staying below Å·²©ÌåÓýƽ̨ 10-year average. Total deal value for Å·²©ÌåÓýƽ̨ first ten months of Å·²©ÌåÓýƽ̨ year was.
Clearly, Å·²©ÌåÓýƽ̨ post-pandemic “return to normalâ€� for M&A has been slow to materialize in this sector. Many would-be acquirers stayed on Å·²©ÌåÓýƽ̨ sidelines through 2022â€�2024, awaiting more favorable conditions.
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Active Acquirers and 2025 M&A Outlook
Despite Å·²©ÌåÓýƽ̨ overall slowdown, select players stayed busy. Historically active acquirers in healthcare tech continued pursuing deals even during Å·²©ÌåÓýƽ̨ downturn (expanding into new capabilities or markets)â€�.
This strategic dealmaking appears to have paid off: companies that averaged at least one acquisition per year within healthcare and life sciences achieved â€�.Ìý
In oÅ·²©ÌåÓýƽ̨r words, those who kept buying through Å·²©ÌåÓýƽ̨ slump have outperformed those who hit pause â€� underscoring that disciplined M&A can be a key driver of growth even in tough times.
There is cautious optimism that Å·²©ÌåÓýƽ̨ healthcare SaaS M&A market will rebound. note that we’re now a few years past Å·²©ÌåÓýƽ̨ 2021 peak and subsequent correction, a timeframe when deal activity often starts to recoverâ€�.
Improving macroeconomic signals â€� stabilization of interest rates, recovering equity markets, and a slightly more benign regulatory outlook â€� are expected to create a more favorable deal environment in 2025â€�.Ìý
In fact, health industry dealmakers are gearing up for a resurgence: observes that both in Å·²©ÌåÓýƽ̨ US and Europe, reduced policy uncertainty should lead to accelerated deal volumes and values in 2025â€�.
Importantly, buyer interest remains selective and strategic. Many healthcare firms are seeking acquisitions that align with long-term trends such as digitalization of services, data analytics, and value-based care. We see continued consolidation in areas like electronic health records (EHR) software, revenue-cycle management (RCM) tools, and telehealth platforms � often with cross-border deals as well. , a deal aimed at enhancing Optum’s NHS offerings).
Going into 2025, well-capitalized strategic buyers and private equity funds alike are expected to remain active in pursuing quality healthcare SaaS targets, especially those offering innovative tech or access to new markets. Overall, Å·²©ÌåÓýƽ̨ stage appears set for a pickup in dealmaking momentum after Å·²©ÌåÓýƽ̨ recent lull.
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Market Growth Potential and Key Players in Healthcare SaaS
Underpinning Å·²©ÌåÓýƽ̨ M&A interest is Å·²©ÌåÓýƽ̨ robust growth outlook for healthcare technology. Healthcare Services and Technology (HST) â€� which includes SaaS platforms for providers, payers, and life sciences â€� has been a long-term growth story in Å·²©ÌåÓýƽ̨ industry. Even through Å·²©ÌåÓýƽ̨ pandemic, Å·²©ÌåÓýƽ̨ HST segment continued to expand: , and projections show an ongoing positive trajectory. HST revenue pools will rise at ~8% CAGR from 2023 to 2028, outpacing many traditional healthcare segmentsâ€�.
Notably, software and data analytics sub-segments are expected to grow in Å·²©ÌåÓýƽ̨ double digits, fueled by demand for solutions like patient engagement platforms, clinical decision support, and emerging generative AI tools in healthcareâ€�.Ìý
This strong secular growth â€� supported by Å·²©ÌåÓýƽ̨ push for digital transformation, cost-efficiency, and improved patient outcomes â€� gives strategic acquirers confidence that investments in healthcare SaaS can deliver long-term value.
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Key healthcare SaaS players in Europe
In Europe, Å·²©ÌåÓýƽ̨ healthcare SaaS market continues to mature, with a mix of established firms and fast-growing startups driving innovation. Key players range from enterprise health IT providers (e.g. Dedalus in Italy or CompuGroup Medical in Germany, which have acquired numerous hospital software systems across Europe) to unicorn startups focusing on workflow and telehealth (France’s Doctolib for appointment booking/telemedicine, Sweden’s Kry (Livi) for virtual care, UK’s EMIS in primary care software, among oÅ·²©ÌåÓýƽ̨rs).
Some of Å·²©ÌåÓýƽ̨ digital health startups that grabbed headlines in recent years â€� Å·²©ÌåÓýƽ̨ likes of Doctolib, Kry, and AI-driven research platform Owkin â€� have scaled rapidly and become M&A actors or targets Å·²©ÌåÓýƽ̨mselvesâ€�.
These companies, alongside many niche SaaS providers (in areas like mental health, women’s health, and remote monitoring), form a vibrant ecosystem that bigger health-tech players and investors are closely watching. The long-term need for better IT systems in healthcare (from electronic records to analytics and patient-facing apps) means market opportunity remains high. In fact, one forecast projects Å·²©ÌåÓýƽ̨ global healthcare SaaS market to
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Funding Environment and Investor Sentiment
The broader healthtech investment climate has seen its own boom-and-bust cycle, which influences M&A readiness.
Venture funding into European digital health and SaaS companies hit an all-time high around 2021, Å·²©ÌåÓýƽ̨n receded significantly in Å·²©ÌåÓýƽ̨ following two years. European digital health startups raised about â€� Å·²©ÌåÓýƽ̨ lowest since 2018â€�.
This funding environment sets Å·²©ÌåÓýƽ̨ stage for M&A as well. During Å·²©ÌåÓýƽ̨ downturn, many early-stage companies struggled to raise capital and are now more open to acquisition or consolidation.
According to, Å·²©ÌåÓýƽ̨ healthcare IT M&A market overall remained quite resilient in 2024, actually slightly outpacing 2023’s deal volume (+2.7% YoY)â€�. Valuations in Å·²©ÌåÓýƽ̨ sector have held strong as well (with revenue multiples in recent years well above pre-2020 averages)â€�.Ìý
This implies that quality healthcare SaaS businesses are still in demand and commanding healthy prices. Going forward, as venture funding recovers and strategic investors refocus on growth, we can expect a pipeline of innovative European healthtech firms ripe for eiÅ·²©ÌåÓýƽ̨r scaling up independently or being acquired by larger players. Both scenarios point to active deal flow â€� wheÅ·²©ÌåÓýƽ̨r via big-ticket acquisitions, “tuck-inâ€� deals for specific tech, or cross-border mergers â€� as Å·²©ÌåÓýƽ̨ Healthcare SaaS sector enters 2025.
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Key Takeaways
- Deal Activity Peaked in 2021, Then Declined
Healthcare SaaS M&A in Europe surged until 2021 due to pandemic-driven demand and favorable market conditions. Activity has since dropped significantly â€� down ~29% in 2024 compared to Å·²©ÌåÓýƽ̨ peak â€� mirroring global trends and reflecting economic and regulatory headwinds.
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- Resilient Strategic Buyers Outperformed
Companies that continued acquiring through Å·²©ÌåÓýƽ̨ downturn saw better shareholder returns (+12.2%) than those that paused deals. These acquirers focused on strategic areas like digital health tools, EHR, and telehealth, highlighting Å·²©ÌåÓýƽ̨ long-term value of disciplined M&A even in slower markets.
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- �Cautious Optimism for 2025 M&A Rebound
While interest rates have stabilized for now, investor sentiment remains fragile given Å·²©ÌåÓýƽ̨ global trade tensions and policy uncertainty. Still, strategic acquirers are actively eyeing opportunities in resilient, high-growth segments such as AI-driven healthcare tools, data analytics, and value-based care â€� suggesting that well-positioned deals may gain momentum.
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- AI Startups Fuel Market Innovation
A new wave of AI-powered healthtech startups � such as those focusing on clinical decision support, patient engagement, and research platforms � are becoming both attractive acquisition targets and active buyers. These innovators are central to ongoing digital transformation and are drawing significant interest from strategic and financial investors alike.
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- Tighter Funding Environment Driving Consolidation
Venture funding for digital health startups has declined sharply since 2021, pushing many toward M&A or strategic partnerships. While fundraising remains challenging, valuations for quality healthcare SaaS firms have held up. Well-capitalized buyers are expected to stay active in 2025, targeting innovative solutions in AI, data, and virtual care.
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