Telemedicine Report H1 2024: M&A Recovers, Technology to Drive Rapid Evolution

The Telemedicine sector showed recovering M&A activity in the first half of 2024 with 28 deals compared to 20 in H2 2023. The US remained a powerhouse of M&A activity with 71% of total deals in H1 2024.

Download the full report below to dive into recent deals and fundraisings, valuations in the sector, our Drake Star Telemedicine Index performance compared to the broader market, a detailed market map of key industry players across different sub-sectors, and many other stats and insights.

The primary rationales for M&A transactions were:

1) Integrations from external players such as insurance and healthcare companies. 

2) Product offering reinforcements from Telemedicine players.

Fundraising activity in H1 2024 decreased by 10% compared to H1 2023, with only 109 deals completed in the first semester, but still increased by 30% compared to H2 2023. The US was the most active with 84 deals recorded during the period, representing over 77% of the fundraising number. Seed and Early-stage fundraising activity slightly decreased in proportion, though it remained the predominant portion of deals. More mature fundraisings, such as growth and expansion investments, increased, already equaling 2023’s total.

Investors favored profit-centric companies with strong fundamentals, showing a conservative investment trend. Consequently, weaker telemedicine entities lagged behind.

Christophe Morvan, Managing Partner at Drake Star, says: "Looking ahead, the telemedicine market is set to undergo rapid evolution as technology advances, new vertical opportunities emerge and regulation becomes enacted by government bodies."

Lawrence Giesen, Partner at Drake Star, adds: "Operators focus on gross margin and profitability. No global consolidator has emerged yet, and M&A activity is mainly tech-driven or for geographic expansions, but transactions remain small." 

We expect several primary trends to shape the future of the sector including:

• AI Integration and advancements in AI and data analytics which enable healthcare practitioners to integrate diagnostics, risk prediction, and personalized treatment planning with increased accuracy and automation. These capabilities will be crucial to address future healthcare challenges such as staff shortages, increasing need for remote chronic care management and healthcare cost reduction.
• Telemedicine regulation implementation, including regulatory changes of telemedicine activities that are being implemented and set permanently among many countries such as the US, UK and EU countries to balance the flexibility introduced during the COVID-19 pandemic with the need for appropriate safeguards. These regulatory changes will integrate telemedicine more deeply into healthcare systems.
• New markets emergence, with Telemedicine no longer being limited to general medicine and expanding into specialized medical fields such as telesurgery, telepsychiatry, and teleophthalmology. These developments in specialized care help remove geographical barriers and access to medical specialists. This expansion will create new market opportunities for telemedicine solution providers, allowing them to develop new products and services.