After a few uneven years in medtech merger and acquisition (M&A) activity, 2025 is shaping up to be a turning point, particularly among leading, cash-rich medical device strategics. According to J.P. Morgan’s MedTech sector report, the first quarter of 2025 alone saw 57 deals totaling $9.2 billion, up significantly from Q1 2024’s 62 deals worth just $2.7 billion. In tandem, venture capital (VC) funding climbed to $4.1 billion—the highest level since 2022.  

The volume signals one thing: strategic buyers are back in the game, and they’re hunting for innovative technologies that fill portfolio gaps, accelerate time to market, and mitigate research and development risks. For medtech startups and mid-size innovators, it’s a moment not only to observe, but also actively prepare for a successful exit.

Key Drivers Behind M&A Growth

There are several unique dynamics converging to accelerate medtech deal volume:

• Capital Abundance: A Surge of Dry Powder—Private equity and VC firms are flush with funds, while retail investor interest in medtech continues to grow. At the same time, many large strategic medtech companies, such as Edwards Lifesciences, Medtronic, and others are sitting on strong balance sheets and sizable cash reserves. All of this capital, often referred to as “dry powder,” is poised to be deployed, fueling investment activity across the sector.
• Strategic and Private Equity Investment Trends—Private equity firms are increasingly targeting medtech companies where they can apply proven operational models to drive profitability. This includes growing interest in management services organizations (MSOs) that streamline administrative and clinical workflows.     

On the strategic side, acquisition activity is being guided by balance sheet strength. Companies like Stryker Corp. and Hologic Inc., which have made large acquisitions, may pause temporarily to rebuild cash. Others with healthier reserves are well-positioned to move forward with additional deals.

• Macroeconomic Stability Encourages Action—Investor confidence is being bolstered by more stable macroeconomic conditions. With greater clarity around interest rates, trade policy, and the broader post-pandemic recovery, the market is seeing reduced uncertainty. There is even less volatility around the U.S. government administration’s approach to tariffs. This stability makes it easier for both private and strategic investors to plan and execute long-term deals.
• AI and Digital Transformation in MedTech—Historically, medtech has been slower to adopt digital tools due to its high-touch, relationship-driven commercial model. But that’s rapidly changing. Sales enablement platforms are now empowering reps with more data-driven insights about surgeons and procedures, accelerating relationship-building and boosting commercial impact.

On the product side, AI-powered technologies such as surgical robotics and predictive analytics are opening new frontiers. The global surgical robotics market is projected to reach $8.89 billion this year and a substantial 32.41% increase in equity funding in the first half of 2025, compared to the same period in 2024. These innovations are not only transforming patient care but also attracting major investment and strategic interest.

Looking forward, the medtech industry is poised for an 18- to 24-month period of clarity and confidence, especially with the expectation of relatively stable interest rates. These conditions combine to create a critical window for opportunistic moves, innovation investments, and targeted acquisitions. 

Implications for MedTech Innovators

The resurgence in deal-making is more than a Wall Street headline: it’s a shift in how big players are approaching innovation. They are relying on emerging companies to drive innovation and then evaluating which ones offer complementary technologies that can enhance their existing product portfolios and fuel growth.

Rather than building everything in-house, companies like Boston Scientific Corp. and Stryker have acquired niche innovators with demonstrated market traction. Boston Scientific’s acquisitions of Intera Oncology, Bolt Medical, and SoniVie reflect a focused push into cardiovascular and stroke-prevention technologies. Similarly, Stryker’s $4.9 billion purchase of Inari Medical underscores how deeply established strategics are willing to invest in scalable, differentiated platforms.

This trend opens the door for medtech innovators to become core enablers of this process—from development and clinical validation to manufacturing and commercial scale-up. Understanding where strategics are placing their bets enables smaller players to align offerings and timelines for greater synergy.

Designing with an Exit in Mind

Defining an exit strategy early is one of the most strategic decisions a startup can make. The chosen exit path—whether it’s a sale to private equity, acquisition by a strategic buyer, or an IPO—will shape critical decisions around product development, operations, team structure, and go-to-market strategy. Without that clarity, a company risks building in the wrong direction, making a successful exit far more difficult.

This was discussed on a panel earlier this year involving Andrew Morris, chief commercial officer of MY01, a medical technology company focused on transforming the diagnosis of limb perfusion injuries through its Continuous Perfusion Sensing Technology (CPST) Platform, and Jeff Byrne, former chief financial officer at Artelon (acquired by Stryker in 2024), which specializes in soft tissue fixation products for foot and ankle and sports medicine procedures.

“A strategic buyer, a private equity partner, or an IPO may require different business structures and commercial strategies,” Morris noted. “If you’re not clear on a sustainable business model and exit plan, your commercial team will likely flounder. How can they target appropriately? How can they build and execute a plan if they don’t understand the exit plan or at least have any long-term outlook?”

Each exit path comes with its own expectations. Understanding these early helps sharpen execution, drive smart decision-making, and dramatically improve the chances of a successful exit. This wave of dealmaking also raises a timely question: How can startups proactively position for acquisition—and secure the best possible valuation—long before a buyer comes knocking?

Paths to Successful Exit

For startups eyeing a private equity (PE) exit, the formula is clear: focus on strong topline growth and a compelling core product. PE firms aren’t looking for perfection; they’re looking for potential. They bring the operational expertise to improve margins and efficiency—but only if there’s a solid foundation to build on. To attract PE interest, a startup must demonstrate scalable revenue streams and a product with real market traction.

Strategic acquisitions are often the most realistic and attractive exit route for medtech startups. Large healthcare companies are constantly looking for innovative solutions that complement their portfolios, fill clinical gaps, or expand market reach. For these acquirers, integration is key. Profitability may take a back seat to operational readiness—assets like clean, accessible data, a well-documented tech stack, and repeatable sales processes can make all the difference. If your systems are designed to plug into your acquirer’s stack smoothly, for instance, your company is more attractive to a strategic buyer.

An initial public offering (IPO) is the most demanding of all exit paths. It requires not only a market-defining product but also a company with the infrastructure to scale, the governance to meet public scrutiny, and a leadership team capable of inspiring long-term investor confidence. This is a capital-intensive, multi-year journey, suited only for companies with bold visions and the resilience to lead an industry, not just participate in it.

Too often, startups build reactively—developing a product or entering a market without understanding how those moves affect their future exit options. Misalignment between operating model and exit strategy is one of the most common and costly mistakes in early-stage companies. Defining the exit early creates focus, sharpens execution, and significantly increases the odds of a successful outcome.

Build a Data-Driven Commercial Strategy

Acquirers are looking for more than just strong clinical outcomes. They also want to see that company leaders truly understand their market and have a clear, scalable growth plan.

Detailed, credible market data can set a company apart and garner the attention of strategics looking to buy. Take, for example, Stryker’s 2024 acquisition of Artelon Inc. Artelon used clean revenue data and sophisticated customer segmentation derived from a commercial intelligence platform to demonstrate commercial traction. “Everybody’s got a $2-3 billion total addressable market (TAM) slide. It’s much more important to say, ‘We did $500K last year and here’s why there’s a credible plan to get to $4 million,’” explained Byrne. “The more specific you can be, and the more you can tie that history to your assumptions, the further you will go with investors and buyers alike.”

Morris shared a similar perspective. “When joining MY01, the first thing we did was use a commercial intelligence tool to analyze all our sales data so we could show potential investors our TAM, specific surgeons’ names, CPT codes, penetration rate, and pipeline by region and rep,” he said. “This allowed us to replace hypothetical vision with real evidence in funding pitches, connect top-down TAM with bottom-up pipeline data and eliminate inefficiencies in reporting and analysis.”

Focus on Clean, Scalable Revenue

Top-line revenue means little if it isn’t repeatable and scalable beyond initial champions or early adopters. “Good, clean revenue and understanding the specific nuances of what that means is really important,” added Morris. “For example, is it a hundred surgeons that did two procedures, or two surgeons that did a hundred procedures? That tells you very different things about scalability.” 

Buyers want to see distributed usage across a broad base of customers, not one-off pilots or heavy dependence on a few key opinion leaders (KOLs). For example, Artelon used clean revenue data and customer segmentation to prepare for its acquisition by Stryker. It helped the company differentiate between top-line growth from KOLs vs. scalable growth from broader market adoption. 

“We were able to show who our doctors were, their procedure volumes, progress over time, customer segments and adoption patterns,” said Byrne. “We also could tie actual sales invoices to surgeons and indications, track onboarding of new doctors, and link that to future revenues.”

To thrive in this ecosystem, startups and their partners need to bring more than innovation to the table. They can add immense value and become a strategic asset by also collecting and presenting deep market insights that are difficult to assess.

Early Adopters Pave the Way

Partnering with early adopters can accelerate market entry but only if they are the right partners.  “Your early adopters send a massive signal to the market about your product,” warned Morris. “Do they signal quality and scalability or just a one-time pay-for-play?” 

Today’s tools allow companies to use data to carefully vet KOLs, ensuring their involvement aligns with long-term product goals rather than just brand optics. Investors may even reach out to respected physicians in the space to validate a product’s relevance, asking whether it addresses a real unmet need, what barriers exist, and how technology might overcome them.

“The more you can build that network of advocates early on is extremely helpful because, at the end of the day, these experts are living and breathing these spaces every single day,” added Morris. Pair that early adoption with robust clinical evidence, published outcomes, and a clear education strategy. This creates a repeatable adoption pathway, not just a single win.

Combine their endorsement with strong clinical data, peer-reviewed outcomes, and a structured education strategy. This creates a reliable, scalable adoption pathway rather than a one-time success story.

Tell a Story That Drives the Deal

Every potential acquirer wants more than just numbers. Strategics also want a compelling, credible narrative that connects a company’s origin, technology, market adoption, and growth trajectory into a unified, data-driven story.

As Byrne explained, “If you’ve been diligent over the years of tracking customers and matching them to your revenue data, that pays dividends when you’re talking to acquirers. You want to be able to tell that story and have clean, robust data to back it up.”

A strong, well-structured narrative anchored in metrics, key milestones, and a realistic growth plan can streamline due diligence and significantly increase your company’s valuation.

What It All Means 

M&A isn’t only about acquisitions: it’s about transformation. For those in medtech, the message is clear: add value beyond execution.

MedTech’s next era of growth will be driven by strategic collaboration, empowered by data, and accelerated by AI. Companies that can help their customers define and validate TAM, streamline integration, surface strategic growth opportunities, and provide consultative selling tools will be viewed as core partners in the acquisition process.

Alex Wakefield is chief revenue officer at AcuityMD, a medtech intelligence platform for more than 300 medical device companies, including six of the top 10. Commercial leaders use AcuityMD to identify target markets, surface top opportunities, and grow their business. Wakefield can be reached at awake@acuitymd.com.