Includes telehealth services, digital health platforms, virtual care coordination and health and wellness services.

In the News: No Digital Health companies went public in 2023, a stark contrast from the recent peak in 2021 where 13 Digital Health companies with an aggregate deal value of $11.5B went public. Market conditions have been a result of the lack of public listings where valuations are viewed not to meet expectations. There is an expectation that there will be large funding rounds and potential public listings in 2024. Pitchbook reports the aggregate value of Digital Health unicorns has increased and now sits at $95 billion. This is viewed as a backlog where companies might begin testing the public markets. As for technology advances in the Digital Health sector, Generative AI will continue to grow and have an impact in the sector to create efficiencies in care coordination and benefits navigation.

Software utilized by healthcare providers and payers for delivery of care.

In the News: The Healthcare IT sector is dominated by value-based-care (VBC) enablers. These enablers help providers transition to value-based care through technology, administration and clinical resources. This sector is attractive due to enablement of value-based-care and technology and processes that improve that transition will continue to be important as the US transitions to the value-based care model over the next 5 – 10 years. According to Pitchbook, there could be consolidation of VBC enablers through acquisitions. Buyers include other enablers, retail providers and potentially payers.

Includes medical devices, implants, diagnostic, imaging software and portable therapies.

In the News: Surgical Robotics has led the way in venture capital funding in the healthcare industry. According to Pitchbook, Surgical Robotics raised over $860 million in 2023 and will continue to lead VC funding in 2024. The Surgical Robotics market is very attractive because it reduces the strain on labor costs and performs a service that has a high margin for healthcare providers. Pitchbook reports that the Surgical Robotics market is estimated at over $10 billion and is projected to double by 2030. Adoption of these technologies will take time and buy in from the surgeons. Long term sustainable capital will also be a key ingredient for successful start-ups.

Companies providing healthcare services to consumers and other healthcare organizations.

In the News: According to Pitchbook, PE healthcare services deal activity in US/Canada is expected to be down 18.9% year over year, totaling 767 deals in 2023. Platform deals / buyouts totaled only 48 in 2023 compared to 98 in 2022. The high interest rate environment is a direct effect of the lack of platform deals. As a result, valuations are down from previous years. Sponsors are reluctant to accept non-favorable returns therefore extending their holding periods. Once rates ease, more trading should begin with the least leverage platforms being the most attractive.