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Venture capital funding in the medtech sector surged to $4.1 billion in the first quarter of 2025, marking the highest quarterly total since early 2022. The rebound reflects growing investor interest in whole-body screening, smart diagnostics, and longevity-focused platforms.
Key deals included a $260 million round for Sweden’s Neko Health and $120 million for U.S.-based Prenuvo, highlighting strong appetite for consumer-oriented diagnostic solutions. In a notable move blending medtech and digital health, Function Health acquired imaging startup Ezra.
Private equity activity also accelerated, with Q1 deal flow surpassing 2024 levels. PE firms backed companies such as Saluda Medical and OrganOx, signaling continued confidence in the sector’s long-term growth.
Exit Activity and Challenges
- M&A remains strong, led by acquisitions from Boston Scientific, and strategic spin-off plans from Medtronic and BD.
- IPO activity lags, with Caris Life Sciences seen as a key upcoming test for PE-backed public offerings.
Despite the funding upswing, challenges remain. Regulatory uncertainty—particularly around diagnostics and Medicaid-linked budgets—continues to influence investment strategies.
The first-quarter momentum signals a potential turning point for medtech, as innovation, consolidation, and strategic capital deployment begin to align after a cautious period.
