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The big healthcare startup buyers have left the building
- Investors aren't expecting many big M&A deals in the healthcare industry this year as historical mega-buyers show little appetite for large deals.
- Healthcare startups seeking acquisitions may have to settle for lower prices or raise down rounds to extend their lifespans, offering discounts on valuations.
- VCs anticipate limited blockbuster returns through big healthcare M&A deals, with better-performing startups holding out for potential IPO opportunities.
- While many healthcare startups hope for increased M&A activity, major buyers like Big Tech, retail, and private equity are reportedly cautious about big digital health deals.
- In 2024, retail healthcare saw downsizing and closures, with companies like Walmart and Walgreens making strategic shifts in their healthcare divisions.
- Big Tech companies faced challenges in healthcare investments, with Amazon's One Medical business losing clients and scaling back operations.
- Health insurers like UnitedHealth Group have faced regulatory hurdles in their acquisition plans, with some proposed mergers falling through due to antitrust concerns.
- Private equity firms remain active in healthcare, focusing on profitable acquisitions, while VCs tend to hold back on selling late-stage healthcare bets anticipating potential IPOs.
- Healthcare startups like Datavant and Transcarent have signaled readiness for M&A activity, with venture capital firms exploring combinations within their portfolios.
- Overall, there are opportunities for digital health startups to be acquired even without billion-dollar deals, as investors and founders seek viable exit strategies amid impatience.
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