Deloitte.

Traversingthemedtechinvestmentlandscape

Isbuild-to-buythenextfrontier?

Traversingthemedtechinvestmentlandscape|Isbuild-to-buythenextfrontier?

2

Contents

Introduction

3

1.Medtechmarkettrends:Howaretraditional

investmentstreamschanging?

4

2.Build-to-buyandother

co-developmentarrangements

6

3.Governanceinsightsforcomplexdealstructures

8

4.Thecurrentinvestmentlandscapeinmedtech

9

5.Wordsofwisdomfortoday’sinnovators

12

AuthorsandAcknowledgments13

Endnotes

1

4

Traversingthemedtechinvestmentlandscape|Isbuild-to-buythenextfrontier?

Introduction

Eightyearsago,Deloitteraisedtheissueaboutfadinginvestmentactivityinearly-stagemedicaltechnology(medtech)companies.Our

2017paper

notedthatsomeentrepreneurswerefindingitincreasinglychallengingtosecureventurecapital(VC)investment,whichmadeitdifficulttopushsomeinnovationstothenext

stageofdevelopment.

Manystartupcompanieswerecaughtbetweentheirinitialroundsoffundingandthedevelopmentofacommerciallyviableproduct.Sincethen,thejourneyhasbecomelonger,moretreacherous,andlesscertainforearly-stagemedtechcompanies.Evenifproduct

developmentrunssmoothlyandcapitalflowssteadily,itcantakeadecadeormoretobringanewdevicetomarket.Inadditionto

financialchallenges,somecompaniescanfaceregulatorychallengesandreimbursementuncertaintiespriortocommercialization.

Intheyearssinceour2017paper,wehavesuggestedthatinvestors,strategic/incumbentmedtechcompanies,andentrepreneurs

consideraco-developmentdealstructure—suchasbuild-to-buy—asapossiblealternativetomoretraditionalinvestmentstrategies.

Whilethebuild-to-buymodelhasbeenusedfordecadesinthe

pharmaceuticalsector,1itisjustbeginningtogainsometractioninmedtech.Underthismodel,astrategicmedtechcompanyagrees

toacquireastartupcompany,oritsassets,atapredetermined

priceoncethestartupreachescertainmilestones.Ifthatstartup

succeeds,thestrategiccompanycanexerciseacalloptiontoacquireitatthepre-negotiatedprice.Whilethisarrangementcanprovide

thestartupwithsomefinancialsecurityandapathforward,therearenoguaranteesitwillbeacquired.Abuild-to-buymodelcould

alsolimittheupsidefortheinnovatorifaproductexceedsmarketexpectations.Forthestrategic,outsourcinginnovationtoastartupcancreateanoff-the-balance-sheetwaytofundinnovationwhile

avoidinginternalresearchanddevelopment(R&D)expenses.Beforeenteringintothistypeofarrangement,expectationsandrisks

shouldbeclearlyoutlinedforallpartiesinvolved.

Alternativefinancingmodelsarebeingdiscussedmorefrequentlyamongstakeholders.Caseinpoint:AtLSI’sannualEmerging

MedtechSummitinMarch2025,threeconferencesessionsweredevotedtobuild-to-buy.2However,conferencepanelistsnotedthatthemodelisstillrelativelynewinmedtech.Bothfailures

andsuccesseswerehighlightedduringthosesessions.

Deloitterecentlyinterviewed16leadersofVC,privateequity(PE),andcorporateventurecapital(CVC)firms,alongwithstrategic

investors,tolearnmoreabouttheshiftinginvestmentlandscapeinmedtech.Duringtheinterviews,weexploredfivekeytopics:

1.Medtechmarkettrends

2.Build-to-buyandotherco-developmentarrangements

3.Governanceinsightsforcomplexdealstructures

4.Thecurrentinvestmentlandscapeinmedtech

5.Wordsofwisdomfortoday’sinnovators

3

Traversingthemedtechinvestmentlandscape|Isbuild-to-buythenextfrontier?

4

1.Medtechmarkettrends:Howare

traditionalinvestmentstreamschanging?

Medtechinvestmentsanddealactivitypeakedin2021asthe

COVID-19pandemicboosteddemandfordigitaltools,diagnostics,remotepatient-monitoringdevices,andotherinnovations.Even

backthen,themajorityofinvestmentcapitalwenttowardlater-stagediagnosticanddigitalcompanies.3Since2021,thenumberofdeals,theirvalue,andthenumberofstartupsthathavebeenacquired

orgonepublichasdeclinedsteadily(figure1).Severalfactorsmighthavecausedinvestorstochangetheirinvestmentstrategies.

Lowinterestrates,whichhoverednear0%in2021,4mayhaveencouragedsomeventurecapitaliststoconsiderriskier

investments.GregGarfield,seniormanagingdirectoratKCKMedTech,suggestedthatsomeinvestmentdollarsduringthatperiodcamefrominvestorsoutsideoftraditionalmedtech.

Hereferstothisas“touristcapital.”

By2023,interestratestopped5%,5whichlikelycreatedamorerisk-averseinvestmentlandscape.Thecostofcapitalisnowatitshighestrateinmorethantwodecades.6Asaresult,manyoftheso-calledtouristinvestorslikelyleftthehealthspace,potentiallytopursuebetterunderstoodopportunities.

Figure1.MedtechVCactivityandexitvalueovertime

MedtechVCdealactivity($M)MedtechVCexitvaluebytype($B)

60,000

50,000

40,000

30,000

20,000

10,000

0

20202021202220232024

60

50

2,500

2,000

40

1,500

30

1,000

20

500

10

0

0

20202021202220232024

DealvalueDealcountBuyout/LBOIPOMerger/

acquisition

2020

2021

2022

2023

2024

CAGR

Dealcount

2,158

1,997

1,634

1,493

963

-15%

Dealvalue($M)

$30,006

$48,331

$38,522

$36,996

$23,452

-5%

Revenue($M)

$11,354

$21,070

$14,781

$8,965

$3,806

-20%

Avg.EBIDTA

($3,046)

($967)

($850)

($2,256)

($1,330)

-15%

Allinmillions

CAGR=compoundannualgrowthrate

2020

2021

2022

2023

2024

Buyout/LBO

$0.58

$1.59

$1.89

$4.31

$1.98

IPO

$15.08

$42.42

$23.59

$1.24

$6.28

Merger/

acquisition

$3.84

$10.53

$11.62

$17.45

$6.75

Allinbillions

Traversingthemedtechinvestmentlandscape|Isbuild-to-buythenextfrontier?

5

Afterpeakingin2021,therehasalsobeenasignificantdownturninVCfundingandexits.7Atthesametime,therehasbeenanincreaseinPEfundingforlessrisky,mid-to-late-stagemedtechinnovation.8OursecondaryresearchsuggeststhatVCandCVCfundingpools

formedtechareshrinkingandpotentiallyshiftingtowardlater-stageandmorematureinnovators.Butwithoutearly-stageinvestors,thepipelinefornew,potentiallylifesavingmedtechcouldrundry.

“Ithinkwe’regoingtoseemoreexamplesoflargecorporates

tryingtofillthegapleftby

underinvestmentinmedtechbytraditionalventurefirms.”

—JoeHeanue,Ph.D.,

CEOTripleRingTechnologies,Inc.

Ourinterviewshelpedtoconfirmthatithasbecomemoredifficult formanystartupstosecurefundingfromVCandCVCinvestors.“Capitalisnotplentifulforall…farfromit,”accordingtoabusinessdevelopmentexecutiveatalargemedtechcompany.Securing

fundingfromVCandCVCinvestors“isaworldofhavesandhave-nots,andtherearemorehave-nots.Thereisnolongeramiddleclassinmedtech.”Unlikebiotechortechnology,medtechhasfewerlargemarketstotapandfewermultibillion-dollarexitopportunities,theexecutiveexplained.Therearealsomorediseasesthatcan

betreatedbypharmaceuticalproductsthanbymedicaldevices.

Moreover,biotechandtechnologyinvestorstendtobelessriskaversethanmedtechinvestors.

ThetraditionalVCinvestorsweinterviewedwerecautious,and

occasionallypessimistic,abouttheoutlookforcertaintypesof

medtechdevices.PEandCVCinvestors,bycontrast,werelargely

optimistic.AaronSandoski,managingdirectorofNorwichVentures,anearly-stagemedtechVC,saidmedicaldevicesappeartobe

“onadownwardtrajectory”giventhedecliningnumberofunmet

clinicalneedsthatdevicescanaddress.Inaddition,hospitals,healthsystems,andcliniciansareunderincreasingfinancialpressure

(see

Deloitte,s2025UShealthcareoutlook

).Tightmarginsoftenmeanthereislessmoneyfornewmedicaldevices.Aphysician-owned

ambulatorysurgerycenter(ASC),heexplained,islesslikelytoinvestinanewdevicethanahospitalthathasalargerbudget.Moreover,healthcareisbecomingincreasinglydecentralizedassome

proceduresthatoncetookplaceonlyinhospitalsarebeingdoneinASCsandotherlower-cost

alternativesitesofcare

.Thistrendcouldcreateasignificantnewmarketfordevicesthatcanbeusedoutsideofahospital,includinginthepatient’shome.ThisalignswithDeloitte’svisionforthe

FutureofHealth

.?

Someintervieweesnotedthattheyareseeingfewerinnovations

inthemedtechspace.Inthepast,surgeonssometimesdevelopedorenhancedmedicaldevicestoaddressunmetclinicalneedsor

toimprovesurgicaloutcomes.9Apost-COVIDbacklogofelective

surgeries,however,mayhaveleftlittletimeforsurgeonstoinnovate,oneintervieweenoted.

Traversingthemedtechinvestmentlandscape|Isbuild-to-buythenextfrontier?

6

2.Build-to-buyandother

co-developmentarrangements

Thechallenginginvestmentlandscapeforearly-stagemedtechcompaniesappearstohavegeneratedincreasedinterestin

co-developmentinvestmentmodels.Undersucharrangements,anincumbentmedtechcompany(strategic)investsinastartupwiththeintentionofacquiringit,oritsinnovation,inthefuture—oftentoextendanexistingserviceline.Thesestructureddealsaresometimesorchestratedbyathird-partyinvestor.

Strategicinvestorsoftenseektoderiskassetsbeforecommitting

toapurchase,whichiswhytheymightchoosetobuyatalaterstage.Astructuredagreementallowsthemtohavetheoptiontobuy,

assumingthederiskingtakesplace.Areastheylikelywanttoderiskincluderegulatoryapproval,reimbursement/marketaccess,supplychainstability,manufacturingprocesses,andmanagement/

execution.Byensuringtheseelementsaresecured,strategic

investorscanmitigatepotentialrisksandincreasethelikelihoodofsuccessfulintegrationandcommercializationoftheacquiredtechnology.

Theinvestorsweinterviewedoutlinedmechanismsthatcould

providefundingtoearly-stagemedtechcompanies.TheysuggestedsomePEfirms,whicharehistoricallylate-stageinvestors,are

exploringearlier-stageinvestmentsthroughbuild-to-buymodels.

Eachinvestmentstrategycomeswithadvantagesanddisadvantagesforinvestors,entrepreneurs,andstrategics.Structureddealscan

provideentrepreneurswithflexibilityandmultiplepathwaystoliquidity,includinginitialpublicofferings(IPOs)andstrategic

acquisitions.Theseinvestmentmodelscouldbeparticularly

beneficialforstartupsdevelopingtechnologiesthatalignwiththestrategicgoalsofalargermedtechcompany.Hereisanoverviewofseveralco-developmentarrangements:

“Itisbettertobuildabusinesstobeboughtthantobuildabusinesswiththeintentionofsellingit.“

—DavidKereiakes,managingpartnerWindhamCapitalPartners

?Build-to-buy:Atitscore,thismodelisacollaborativepartnership

betweenanentrepreneurorstartupandanincumbentmedtech

company/strategic.Typically,astrategicidentifiesanearly-stage

companythathasaproductofinterestandnegotiatestheterms

ofitsinvestment.Thispartnershipallowsbothentitiestowork

towardacommongoal,combiningthesmallercompany’s

agilityandinnovationwiththelargercompany’sresources,

experience,andmarketreach.Forearly-stagecompanies,

suchanarrangementcanprovideastructuredpathwayfor

innovationandacquisitionwhileminimizingfinancialrisk.Atthe

sametime,itofferslargecompaniesafinancialstakeininnovativecompaniesthatshowpromise.Sometimesthisrelationshipbeginsduringthecompanyformationstage—beforeatechnologyis

developed—iftheinnovatorhasacompellingvalueproposition.Theproductorsolutionmightbetailoredtomeetthespecific

needsofthelargerstrategic,whichcanimprovethechancesofitbeingacquired.Anentrepreneurtryingtogetanewcompanyoffthegroundmightnothavethetimeorcapacitytochasefunding.Thistypeofpartnershipallowsbothentitiestoworktowardacommongoal,leveragingeachother’sstrengths.Build-to-buyhastendedtobeastapleinthebiotechnologyspace,providingastructuredpathwayforinnovationandacquisition.Inmedtech,however,thisinvestmentstrategyappearstobeinits

nascentstages.

Thebuild-to-buymodelalsoinvolvestakinganownershipstakeinthestartupcompany,fillingboardseats,andretainingtheoptiontobuythecompanyifmilestonesaremet.Intheend,startups

mightchoosetotradefuturevaluations—potentiallyathigher

levels—togetthefinancinganddevelopmenthelptheyneed.Forstrategics,thebuild-to-buymodelcanprovideaguaranteeontheirinvestmentandreducecompetitionfromotherbuyers.However,someinvestorstoldusthatgettingstrategicstothenegotiating

tablecanrequirecarefulorchestration.

?Buy-to-build:Unlikethebuild-to-buymodel,buy-to-buildbeginsbyidentifyingthetypesofproductsastrategicwantstoadd

toitsportfolio.Thisstrategycanmakeiteasiertoidentifythe

typesofinnovatorstotarget.Inthismodel,aPEfirmmightuseawell-positionedplatformcompanytomakeadd-onacquisitionsofsmallercompanies.Thesesmallercompanieswouldbecomecomponentsoftheplatformcompany.

Traversingthemedtechinvestmentlandscape|Isbuild-to-buythenextfrontier?

7

“Bycreatingaplatformcompanythatactslikeaholdingcompany,youcanmakeanumberofsmallerinvestmentsthatexpand

andacceleratedevelopmentopportunitiesacrossmultiple

productsandtechnologies,”explainedTimDugan,founder

andmanagingpartneratWaterStreetHealthcarePartners.

“Thecompanyessentiallyactsasaventuremicro-fundwiththesupportofaPEfund.”Thisportfolioholdingcompanycouldallowformoreflexibilityandincrementalimprovements,makingitanattractiveoptionforPEfirmslookingtoenhancethevalueoftheiracquisitions.DavidBeylik,apartneratAjaxHealth,notedthathisfirmfocusesonacombinationofcompanyformationand

acquisitiontomeettheneedsofastrategicpartner.Itsprocessbeginsbyaligningwithastrategiconaverticalandthenidentifyingthetypesofproductsthatareneeded.Thishelpstoidentifytheinnovatorstotarget.Buildinganewcompanyoff-the-balance

sheet(forthestrategic),canhelplimitdistractionswhilebuildingatailor-fitportfolio.

?Hybridinvestmentmodels:Early-stagemedtechcompanies

aretypicallyfundedbythefounders,theirfamiliesandfriends,

andangelinvestors.Foundersmightalsoturntohigh-net-worth

individualsand/orfamilyofficesforfundingwhenmoretraditionalsources,likeVCfirms,arereluctanttoinvest.Inadditionto

personalnetworks,someearly-stagemedtechcompaniessecuregovernmentgrantsortapfundingfromnonprofitorganizations.

Forexample,ratherthanjustdonatingmoneyformedical

research,somepatientadvocacygroupsandfoundationshave

established,orareinterestedinestablishing,venturefunds.“Ifyoucangetapatientadvocacygrouporphysiciansocietybehindyourproduct,thenyou’vegotkindofabuilt-inkindofcheeringsquad

fortheproduct,”saidPaulGrand,CEOofMedTechInnovator.

Partneringwithadvocacygroupsmightalsoattracttheattentionofcommercialhealthplansandgovernmentpayers,whichcould

helpreducefuturereimbursementhurdles,headded.However,

patientadvocacygroupsandfoundationsmightnotunderstand

themedtechindustryaswellastheymightunderstand

biopharma.Thesehybridarrangements—whichblendtraditionalventurewithalternativesourcesofcapitaltosupportearly-stagecompaniesthroughtheirdevelopmentcycles—arebecomingmorecommoninmedtech(see

Reinvigoratingmedtechinnovation

).

?Structureddeals:Theseareavariationofthehybridbuild-to-buymodel.Unlikeatraditionalbuild-to-buy,whichistypicallybetweenastartupandastrategic,astructureddealisoftenathree-way

marriagebetweenalargestrategiccompany,aninvestor,andastartup.Sucharrangementscouldbeattractivetoastrategicasameansofmitigatingrisk.Regardingthesethree-waydeals,JoeMullings,CEOofsearchfirmTheMullingsGroupsaid,

“You’regoingtoseethelargestrategicsdooff-balance-sheet

investmentsthatallowthemtocontinuetoinvestwithout

impactingshareprices.”Oneventurecapitalinterviewee

referencedBlackstoneInc.asanexemplarthatisdoing“financialengineeringconstructsofdifferentflavors,whetherthey’rebuild-to-buyorfranklyprovidingtransactionstomovetheseassetsofftheP&Lofthebuyer.”

However,therecanbechallengesingettingallthreepartiesto

agree.Theinvestmentfirmmightwantmorecontrolbecauseit

hasinvestedcapital.Thestartup’sCEOhasthevisionandmight

expectgreatercontrol.Andthestrategic’sboardmightwantmorecontrolbecauseitcouldwinduppayingasignificantpremiumtoacquirethestartup.ToddPope,apartnerwithRevivalHealthcareCapital,notedstructureddealscanbechallenging.“Itcantake

significanttimeandefforttocometoathree-wayagreement

betweentheinvestor,thestrategic,andthetargetcompany.Whenthisalignmentdoesoccur,structureddealscanofferapathfor

thestrategictoacquireacompanyafterkeymilestonesaremet.It’snotamodelforeveryone,butwheninterestsarealigneditcanreduceriskforallparties.”

“Theemergenceofbuild-to-buymodelsprovidesastructuredpathwayforinnovationwhilemanagingfinancialrisks.“

—ToddPope,partner

RevivalHealthcareCapital

Traversingthemedtechinvestmentlandscape|Isbuild-to-buythenextfrontier?

8

3.Governanceinsightsforcomplexdealstructures

Anewtechnologyorinnovationmightnotbeenoughtoattract

investors.Effectivegovernanceandinvestorinvolvementare

importantforthesuccessofstartups.Investorscanaddvalue

throughtalentrecruitment,raisingadditionalcapital,andprovidingspecializedinputintoregulatoryandreimbursementprocesses.

Forexample,Revival,aPEinvestorthatspecializesinmedical

devicesanddiagnostics,investsinstartupmedtechcompanies,

provideshands-onleadershipandresources,andthenhelpsthosecompaniesgrowandexpand.10However,theremayalsobebad

adviceandstrategicmisdirectionfrominvestors,whichcanhindertheprogressofstartups.“Themedtechlandscapeisfilledwith

promisingtechnologiesthatdidn’tadvancebecauseleadershipneededsupporttotakethecompanytothenextlevel,”WaterStreet’sDugansaid.

Astartupcompanyshouldbeabletodemonstratestrongleadershipandanabilitytomakegooddecisions.Thecompany’sleadersshouldpossesstheskillsandbackgroundnecessarytomoveacompany

fromthegroundlevelintothenextphase.Goodgovernanceis

involvedinensuringmilestonesarereachedontime.Governancemechanismsandcompensationstrategiescanhelpensurethatkeystakeholdersremainmotivatedandfocusedonachievinggoals.Astartupcompanymighthavemultiplefounders,eachwithdifferentstrengths,butitshouldonlyhaveoneCEO.Theretendstobelessfrictioninanewcompanywhenthereisasharedeconomicvisionamongthefounders,butoneoverallleader.Thereisadangerthatastartupmightburnthroughitscapitalandhavelimitedfundingtopaythecompany’sleadersandkeystaff.

“Communicationmightbethemostcriticaltraitofanyentrepreneur.Youmustbeabletocommunicateandconvinceasoftwareengineer,an

investor,anaccountant,andasalesreptocomealongwithyouona

journey.Communicationhasahighcorrelationwithsuccess.”

—DavidKereiakes,managingpartnerWindhamCapitalPartners

Inabuild-to-buymodel,strategicsandinvestorsshouldensure

thatthecompany’scoreemployeesareincentivizedtomovethe

organizationforwardandmeetmilestones.Incentivesystemsare

involvedinattractingandretainingtalent,aligninginterestsof

foundersandinvestors,andavoidingconflicts.Culturalintegrationshouldalsobeconsideredwhenembarkingonabuild-to-buy

arrangement.Mergingtheculturesofalargecorporationwithan

innovativestartupcancreatechallenges.Differencesin

organizationalstructure,managementstyles,andoperational

processescanleadtofrictionandhindertheseamlessintegrationofthenewcompany.Inaddition,thetypicallyslowandbureaucraticprocessesofalargecompanycouldhinderthecreativityandgrowthofastartup.“Oneofthebiggestchallengeswefaceisaligningthe

innovativespiritofstartupswithourestablishedcorporateculture,”aseniorexecutivefromalargemedtechcompanytoldus.

Traversingthemedtechinvestmentlandscape|Isbuild-to-buythenextfrontier?

9

4.Thecurrentinvestmentlandscapeinmedtech

Agrowingnumberofmedtechinvestorsaresidesteppingearly-stagemedtechcompaniesinfavorofmorestable,later-stagecompanies(see

Reinvigoratingmedtechinnovation

).Manyoftheseinvestors

requirethosecompaniestoprovideclinicaldataandotherevidencebeforecommittingtofunding.ThisshifthasincreasedthepressureonSeriesBcompanies,makingitharderforthemtoraisecapital

comparedtoSeriesAorCrounds.Overthepastfouryears,theproportionofseed-roundandearly-stageVCdealshasdeclinedinbothdealcountanddealvaluecomparedtootherdealtypes,accordingtoDeloitte’sanalysisofinvestmentdata.11

ManyVCcompaniesinvestinmoreestablishedcompaniessothattheycanrealizereturnsmorequickly.However,evenlater-stagecompaniesaretakinglongertoexitthemarket.MikaNishimura,anoperationalpartnerwithGildeHealthcarePartners,shared

thatherlate-stageVCinvestmentcompanyhastendedtotargetcompaniesthathavethepotentialtoexitthemarketafterthreetofiveyears.Overthepastseveralyears,changesinthemarkethavecausedthattimelinetosignificantlystretch,shesaid.

NorwichVentures’Sandoskisuggestedtheremaybemore

opportunityformedtechstartupsthatfocusonsoftware.

“Theyoungergenerationofentrepreneursisnotsointerestedinmedicaldevices…they’reinterestedinsoftware,”hesaid.

Severalintervieweesechoedthissentimentandagreedtheremightbemorepotential,andinterest,inmedicalsoftware

whencomparedtohardware.

Buttherewilllikelyalwaysbeaneedforinnovativehardwarein

medtech—andinnovatorswhocanbuildabettermousetrapanddominateacompetitivemarket.Caseinpoint:Inlate2023,theUSFood&DrugAdministration(FDA)approvedpulsedfieldablation(PFA)foratrialfibrillation.Ratherthanusingheatorcoldenergy,asintraditionalablation,PFAusesshortburstsofenergy.The

innovationappearstohavefewerdownsiderisksandbetterpatientoutcomes.12PFAdevicesarenowbeingusedinclinicalsettings.13

Investorsseepotentialinproductsfortheheartandmind

Cardiovascularproducts,cancerdiagnostics,andneurostimulationwerementionedaskeyinvestmentcategoriesamongtheinvestorsweinterviewed.WhileCVCinvestorssawhighpotentialinthose

areas,VCinvestorsweremorecautious.PEinvestorsalsosawpotentialinneurostimulationandrobotics.

Cardiovasculardevicesandsolutionshaveconsistentlybeenafocalpointforinvestorsduetothehighprevalenceofheartdisease

andtheongoingdemandforinnovativediagnosticsandtreatmentoptions.14Inthefirstquarterof2024,cardiovascularsolutions

attracted$650millioninventurecapital,underscoringarobust

investorconfidenceinthepotentialforinnovationandgrowthinthissubsector.15Thesignificantinvestmentinthiscategoryhighlights

ongoingeffortstodeveloptechnologiesthatcanimprovepatient

outcomes,reducemortalityrates,andenhancethequalityoflife.

Innovationsinthecardiovascularspaceincludeminimallyinvasive

surgicaltools,advancedimagingtechnologies,andnoveltherapeuticdevicesthatoffereffectiveandminimallyinvasivetreatment

options.Investorstendtobemorecomfortablewiththepredictableregulatorypathwaysandestablishedmarketdemandintheseareas.

Beyondcardiovascularproducts,thereisagrowinginterestin

innovationsthataddressmemoryloss,Alzheimer’sdisease,andotherbrain-relatedissues.Thebrainremainsoneoftheleast

understoodorgans,whichcouldbeagrowthareaformedtech

innovators.CeriBellInc.,acommercial-stagemedtechcompany

focusedonthediagnosisandmanagementofneurological

conditions,isamongthefewmedtechcompaniestohavehad

aninitialpublicstockoffering(IPO)duringthepastfewyears.Thecompany’sheadbanddeviceisdesignedtospeedseizuredetectioninhospitals.16CeriBell’sIPOwasissuedinOctober2024.Other

recentmedtechIPOsincludeBetaBionics(January30,2025)17andKestraMedicalTechnologies(March2025).18

Traversingthemedtechinvestmentlandscape|Isbuild-to-buythenextfrontier?

10

Whilecancertreatmenthastraditionallybeendominatedby

biopharma,medtechinnovatorsareexploringnewavenues—

suchasradiationandotherenergy-basedtreatments—totreat

thedisease.Inaddition,artificialintelligence(AI)toolsarebeing

integratedintosomedevicestoenhancedetectionandtreatment.Earlydiagnostictools,includingadvancedbloodtests,arebecomingmoreproficientatdetectingcancerinitsearlieststages,offeringapotentialareaforfurtherinvestment.

Painmanagementisanotherpotentialgrowthareafor

innovatorsandinvestors.Paintendstobeacomplexand

notyetfullyunderstoodarea.Somemedtechcompaniesare

exploringapproachestopainrelief,includingneurostimulation

andpersonalizedtreatmentplans.Personalizedcareandremotemonitoringtechnologiesarealsogainingtraction,drivenbytheirabilitytot