EY report reflects steady VC and M&A activity in medtech industry
EY’s latest industry pulse confirms medtech is on a steady climb, reaching a $584bn valuation for the 12 months ended June 30 and tracking toward 6% to 7% revenue growth by the end of 2025. The report highlights a sector that has shrugged off some macro noise and kept investors interested. That blend of resilient top-line gains and selective capital flow is shaping strategic decisions across the industry.
Venture capital activity looked healthier in the first half of the year, with EY reporting VC investments up 16% versus the same period in 2024. Average financing rounds jumped to $36m, which the report notes as a 122% increase over 2024 levels. Those figures point to fewer, larger rounds focused on companies with clear paths to scale.
Funding is becoming more concentrated, as backers target high-growth assets and technologies that can move quickly from development to commercial traction. The report flags pulsed field ablation, structural heart, robotics, diabetes and orthopaedics as standout areas where innovation meets market demand. That concentration reflects investor discipline and a preference for opportunities with defensible growth profiles.
“Medtech continues to deliver steady growth, and performance is being driven by innovation and market expansion in high-growth areas such as pulsed field ablation (PFA), structural heart, robotics, diabetes and orthopaedics,” explained John Babitt, EY’s global medical technology leader.
Notable financings during the report period include Canadian PFA system company Kardium securing C$340m and British robotic surgery firm CMR Surgical attracting equity and debt capital of around $200m. Those deals underscore the point: capital is available, but it flows where technology and commercial readiness align. The result is a sector where depth of capital matters as much as breadth.
Babitt summed up the sentiment plainly: “The [medtech] sector is proving to be a safe harbour within the relatively underperforming broader healthcare industry, generating stronger results and building confidence for the quarters ahead.”
Companies adopt “judicious” approach to M&A
On the M&A front, EY spotted a shift toward “more judicious” dealmaking, meaning fewer headline-grabbing transactions but larger average deal sizes. Total M&A spend for 2025 to date hit $38.8bn, with an average deal size of $497m, reflecting notable increases versus both 2024 and the prior decade. That mix suggests corporates are picking targeted, strategic bets rather than chasing volume.
The biggest transactions in the year to June 30 included Stryker’s $4.9bn acquisition of Inari Medical, Johnson & Johnson’s roughly $1.7bn move for V‑Wave, and Edwards’ combined $1.2bn activity for Endotronix and JenaValve. These deals show buyers are still willing to pay premium prices for assets that fill gaps in portfolios or accelerate entry into high-growth areas. The emphasis is on quality over quantity, with fewer but more meaningful opportunities shaping the market.
The report quoted EY Americas life sciences leader Arda Ural noting that M&A activity is concentrated on those higher-impact targets, a pattern that reflects both board-level caution and a desire to preserve capital for transformational stakes. That dynamic gives established companies a chance to top up their pipelines without overpaying for incremental scale. For sellers with clear clinical differentiation, timing and diligence remain the levers that unlock value.
IPOs expected to continue
IPOs showed signs of life but remained limited in number during the survey window, with roughly five medtech floats noted, including Beta Bionics’ $204m listing and Kestra’s $204m IPO in March. Despite the small sample, EY sees continued appetite for public exits, especially as market windows open around major investor events. Public markets offer validation and capital that can accelerate commercialization, which keeps the IPO option in play for confident founders.
“We would also expect to see a lot of dual process, where companies move through and evaluate going public, but also run a mini process from an M&A price check standpoint,” Babitt added. That dual-track strategy has become a staple for companies aiming to maximize outcome optionality and to test valuation under different scenarios. The playbook gives management teams bargaining power whether they choose an IPO or a sale.
Beyond the reporting period, the landscape showed further signs of transactional momentum: HeartFlow completed a $364m IPO in August, and there were reports that Medline may be weighing a potential $5bn offering. These developments indicate that both strategic buyers and public investors are watching medtech closely for the next wave of scaled opportunities. The pattern suggests a market that is selective but far from closed.
EY’s release also came against the backdrop of a Section 232 investigation launched on September 25 into imports of medical devices and related equipment, an inquiry that briefly pressured medtech stocks. The long-term impact of such trade and security probes remains an open question for investors and corporate leaders weighing supply chain plans and manufacturing footprints. For now, companies are balancing near-term capital moves with longer-range strategic adjustments.
It remains to be seen how these macro and micro forces will interact, but the report paints a medtech sector that is deliberate, well-funded where it counts, and strategically active across both private and public markets. The combination of targeted VC, heavier average M&A deals, and steady IPO interest suggests industry participants expect growth opportunities to reward disciplined investors and operators.
The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
