ComCap’s Provider-Focused Digital Health Software Market Activity Update

ComCap’s latest coverage on the digital health sector focused on provider solutions is aimed at informing the market players, as well as financial and strategic investors, on the key sectoral trends, market shifts, and M&A / investment trends within Provider IT. The report highlights the key growth drivers in the sector, as well as showcases key disruptors and recent deal activity within the space.

Key trends highlighted in ComCap’s Q4 2023 report include:

  • Post pandemic, labor shortages, staff burnout, and high wage inflation have induced healthcare providers to augment their tech stack to automate tasks and enhance productivity.
    • Financial investors have promptly capitalized on this trend and our report indicate that over $6.5BN has been invested in provider-focused health tech companies in North America and Europe since Jan’21.
  • Major technology giants have been actively pursuing growth in the B2B digital health sector through acquisitions. Additionally, leading healthcare IT vendors are increasingly adopting similar strategies to expand their range of offerings.
  • PE firms have shown high interest in the B2B digital health space to capitalize on post-pandemic growth opportunities.
    • This interest stems from healthcare providers’ rising investment in RCM and billing platforms, with an aim of streamlining their revenue cycle processes.
  • Escalating cyber threats drive hospitals to boost investments in cybersecurity and IoT security.
    • Financial investors have invested in cybersecurity startups such as LogicGate, Cylera, and Cynerio since Jan’21.
    • Moreover, strategic investors are also active in the space with notable deals including Area 1 Security by Cloudflare for $160.6MM.
  • Global government funding and market consolidation drives the growth of the EHR market as organizations seek to enhance their capabilities and maintain a competitive edge.
  • European healthtech firms are driven by the compelling revenue potential and the market’s resilient growth outlook in the expansive and privately driven US healthcare sector, which motivates them to pursue market entry in the US despite challenges.

Please reach out to ComCap to discuss your transaction needs within the Provider IT space.