Emerging healthcare tech acquisitions are on the rise

by Michael Hill

Acquirers are reaching for healthcare companies built around emerging IT categories at an unprecedented rate in 2019. Our data suggests that widespread adoption of the Internet of Things (IoT) and machine learning among healthcare providers could make these technologies an increasingly prominent feature of healthcare IT M&A.

Just three months in, 2019 has already seen nine emerging healthcare tech deals, matching the total from all of last year, according to 451 Research’s M&A KnowledgeBase. Targets include both early-stage startups with roots in machine learning or IoT (e.g., KiviHealth and SOMA Analytics) and more mature vendors that have refined their offerings around emerging technologies (e.g., MedecinDirect, Temptime and Lightning Bolt Solutions).

Healthcare providers have been adopting IoT and machine learning throughout their networks for some time now. Indeed, our Voice of the Enterprise: IoT, Workloads and Key Projects 2018 survey found that 73% of healthcare providers report having at least one IoT project in either production or proof-of-concept stage. That level of IoT adoption puts healthcare at the top of industry verticals, right alongside manufacturing.

We expect healthcare’s adoption of these technologies to continue to build off of that head start. In 451 Research’s report on The Medical Internet of Things, we anticipate the deployment of connected medical devices to expand to 600 million by 2025 from about 300 million in 2015. And although most IoT and machine learning acquisitions in healthcare IT have been modestly sized, that level of deployment implies a prognosis of increasing size and frequency of such transactions.

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Posted in M&A