Healthcare Investing Trends: Profitability, Medicare, Tech, Consolidation

AI-Driven Growth Meets Healthcare Impact – Mersault Capital’s Primary Care Platform   We’re continuing to build momentum with Mersault Capital’s $175M primary care roll-up program.   Designing, consolidating and scaling 50+ primary care and wellness practices across the U.S., combining operational excellence with AI-driven deal sourcing and a robust MSO infrastructure — including a partnership with Oracle Health.   We’ve structured the program through disciplined capital calls over six years, beginning with an initial $5M equity round offering flexible participation and attractive terms for early investors.   Our goal: to transform how primary care is delivered, improving access, efficiency, and physician alignment — while targeting ~35% net IRR over a 7-year hold.*   If you’re an accredited or institutional investor focused on healthcare, technology, or platform consolidation strategies, we’d welcome a conversation.     *Unless otherwise referenced, all statements, projections and opinions were provided by Company management team. Past performance is not indicative of future results, and there can be no assurance that similar results will be achieved. Historical data and a detailed financial model with assumptions and scenario analysis functionality are available. Target returns and financial projections are presented solely to show Company’s objectives, should not be used as a primary basis to invest, and there is no assurance of future performance, or the adequacy of the methodology used. Private securities are speculative, illiquid, and carry a high degree of risk – including the loss of the entire investment. For use by institutional investors only; not for use by retail investors.

AI-Driven Growth Meets Healthcare Impact – Mersault Capital’s Primary Care Platform   We’re continuing to build momentum with Mersault Capital’s $175M primary care roll-up program.   Designing, consolidating and scaling 50+ primary care and wellness practices across the U.S., combining operational excellence with AI-driven deal sourcing and a robust MSO infrastructure — including a partnership with Oracle Health.   We’ve structured the program through disciplined capital calls over six years, beginning with an initial $5M equity round offering flexible participation and attractive terms for early investors.   Our goal: to transform how primary care is delivered, improving access, efficiency, and physician alignment — while targeting ~35% net IRR over a 7-year hold.*   If you’re an accredited or institutional investor focused on healthcare, technology, or platform consolidation strategies, we’d welcome a conversation.     *Unless otherwise referenced, all statements, projections and opinions were provided by Company management team. Past performance is not indicative of future results, and there can be no assurance that similar results will be achieved. Historical data and a detailed financial model with assumptions and scenario analysis functionality are available. Target returns and financial projections are presented solely to show Company’s objectives, should not be used as a primary basis to invest, and there is no assurance of future performance, or the adequacy of the methodology used. Private securities are speculative, illiquid, and carry a high degree of risk – including the loss of the entire investment. For use by institutional investors only; not for use by retail investors.

Market Conditions for Health Startups (Analytical) Healthcare investing has changed dramatically in the past five years. While funding for digital health and biotech reached record levels during 2020–2021, the market today demands much stronger fundamentals. Founders often ask me: What do investors want to see now? Here’s what stands out: 1. Regulatory readiness: A Clear understanding of approval processes (FDA, EMA, CE marking) is no longer optional. Even at early stages, founders should show a roadmap. 2. Clinical validation Pilots with hospitals, published studies, or partnerships with universities build credibility. 3. Reimbursement strategy: Who will pay for your solution? Patients, insurers, governments? Many pitches skip this, but it is often a dealbreaker. 4. Scalability: Can your solution expand across borders without a full redesign? Investors look for models that travel. The bar is higher, but the opportunity is also bigger: healthcare spending continues to rise globally, and systems are in desperate need of solutions that reduce costs and improve patient outcomes. For founders, the message is simple: prepare early, validate often, and never underestimate the importance of aligning your business model with healthcare economics.

Market Conditions for Health Startups (Analytical) Healthcare investing has changed dramatically in the past five years. While funding for digital health and biotech reached record levels during 2020–2021, the market today demands much stronger fundamentals. Founders often ask me: What do investors want to see now? Here’s what stands out: 1. Regulatory readiness: A Clear understanding of approval processes (FDA, EMA, CE marking) is no longer optional. Even at early stages, founders should show a roadmap. 2. Clinical validation Pilots with hospitals, published studies, or partnerships with universities build credibility. 3. Reimbursement strategy: Who will pay for your solution? Patients, insurers, governments? Many pitches skip this, but it is often a dealbreaker. 4. Scalability: Can your solution expand across borders without a full redesign? Investors look for models that travel. The bar is higher, but the opportunity is also bigger: healthcare spending continues to rise globally, and systems are in desperate need of solutions that reduce costs and improve patient outcomes. For founders, the message is simple: prepare early, validate often, and never underestimate the importance of aligning your business model with healthcare economics.

Yes, we want effective and quality services to be more accessible and affordable … BUT… “Investors want software economics. Healthcare is a service business. You can't deliver medical care without humans. And humans don't scale like code.” Ghomi

The Great Healthcare Investment Shake-Up: Why Healthtech Is Winning Big in 2025 What’s shaking up the healthcare investment landscape in 2025? One word: Healthtech. The just-released PitchBook H1 2025 Healthcare Funds Report reveals a seismic shift—healthtech VC funds have officially outpaced traditional life sciences VC funds in capital raised for the first time ever. Digital health, AI-driven solutions, and healthcare IT are stealing the spotlight, while many biopharma and medtech funds struggle to maintain momentum. Here’s why this matters: - PE funds focused on healthcare are “weathering the storm” and delivering outsized returns, outshining peers in an otherwise tough market. - Traditional life sciences fundraising is in decline, challenged by long development cycles and an unpredictable IPO climate. - Investors are doubling down on digital health and AI, betting on innovation that can scale rapidly and transform patient care. My Take: Healthtech is no longer the side show—it’s the main stage. Established VC managers are pivoting, while newcomers are raising record amounts. This shift won’t just change where the money flows; it will reshape how healthcare is delivered and accessed across the globe. Read further here: https://lnkd.in/dKEzjQe2

💊 Healthcare Investment Surge In the healthcare sector, digital health funding has reached $9.9 billion in 2025, surpassing last year's total of $8.4 billion. This growth is propelled by significant funding rounds, with 19 mega-deals exceeding $100 million, indicating strong investor confidence in AI-powered healthcare solutions

Here's something that's been gnawing at me for months, and I need to get it off my chest. We're systematically killing promising digital health companies because nobody wants to admit that healthcare isn't software. I keep seeing the same tragedy play out. Smart founders build legitimately useful technology. They raise what feels like a decent seed round. Then they spend the next two years doing exactly what they're supposed to do in healthcare, clinical validation studies, working through regulatory pathways, building EHR integrations, negotiating with payers, and when they come back for Series A, investors look at their metrics and say "where's the traction?" The traction is sitting in a peer-reviewed journal article proving your product reduces readmissions by twenty-five percent. The traction is a coverage policy from a Medicare contractor. The traction is live integrations with three major health systems. But none of that shows up as monthly recurring revenue growth, so it doesn't count. The dirty secret is that most digital health companies need to spend the majority of their early capital proving things to external gatekeepers before they can even start testing real product-market fit. Clinical outcomes. Regulatory classification. Reimbursement pathways. You cannot iterate your way through these requirements. You cannot growth hack a Medicare coverage determination. These processes take years and millions of dollars, and that's if you execute perfectly. But try explaining that in a pitch meeting. Investors hear "we need thirty-six months and six million to reach commercialization" and pattern-match to bloated enterprise software from 2008. So digital health founders learn to lie. They present aggressive timelines they know are impossible, raise insufficient capital, then either die or pivot away from the actual problem they wanted to solve. I went deep on this in a longer piece, breaking down the actual economics across different digital health categories and proposing better frameworks for measuring progress when revenue is a lagging indicator. The core argument is that we need milestone-based financing tied to translational progress, not arbitrary timeframes. The companies that figure out how to navigate this misalignment will build massive, defensible businesses. But most won't survive long enough to find out. __________ Disclaimer: These thoughts and opinions are my own and do not reflect the views of my employer or any other entities. __________ Link to the full analysis in the comments below.

Cantech Letter has published a feature article based on a research note by Stifel Institutional analyst Justin Keywood, CFA that suggests investors revisit WELL Health (TSX: WELL) as a result of recent transactions and the early consolidation trend of Canadian healthcare assets. The article suggests that WELL may be undervalued as Stifel maintains its “Buy” rating with a $9 target price, noting the company's strong growth strategy through clinic acquisitions and digital transformation. The article further highlights upcoming catalysts, including continued M&A of Canadian clinics, margin expansion, and the potential spin-out of its WELLSTAR Technologies digital SaaS platform. Read the full article below. https://ow.ly/nRtZ50X5WMu