The HealthTech sector is undergoing explosive growth, driven by the convergence of healthcare and technology. Valued at over $220 billion in 2022, the global digital health market is projected to exceed $1 trillion by 2032. Notable drivers include increased demand due to aging populations, global health crises like COVID-19, and regulatory tailwinds such as streamlined FDA and EU Medical Device Regulation pathways for digital health tools. This transformation presents a compelling opportunity for investors – not just to generate strong financial returns, but to help shape the future of global healthcare.
Investing in HealthTech: Insights and Strategies for the Future, published in May 2025 by MEDKAP, a Swiss-based angel investor association focused exclusively on healthtech, explores the investment landscape across four major verticals: MedTech, Diagnostics, Digital Health and TechBio.
Each area offers unique potential, from AI-driven diagnostics and wearable health monitors to digital therapeutics reimbursed by insurance and AI-powered drug discovery:
- MedTech: A high-risk, high-reward domain. While 9 out of 10 startups may fail despite regulatory approvals, successful ventures can yield massive returns. Investors are advised to focus on startups with clinical need, regulatory strategy, and reimbursement plans in place.
- Diagnostics: Positioned as a $109 billion opportunity, diagnostics is central to personalized medicine and cost-effective care. Breakthroughs in AI, genomics and wearables are transforming early disease detection. Despite regulatory challenges, diagnostics promise impactful exits, especially in oncology and chronic disease monitoring.
- TechBio: This emerging field blends biotech with AI, big data and automation, and is reshaping drug discovery, protein engineering and personalized therapies. Backed by growing corporate interest from pharma giants like Sanofi and Novartis, this space offers potentially lucrative exits but demands deep technical validation.
- Digital Health and DiGA: Germany’s DiGA system (a framework introduced by the German government to integrate digital health applications into the healthcare system) offers a glimpse into national reimbursement of digital therapeutics. However, commercialising DiGAs is burdened with challenges including limited market awareness, slow prescription processes, high initial pricing, and regulatory changes on the horizon. Success hinges on commercially-savvy founding teams, attractive indications, and platform strategies.
The COVID-19 pandemic accelerated adoption across the board, especially in remote care and data-enabled health solutions. However, challenges remain. Regulatory approval processes are often complex and lengthy, and commercialisation strategies require nuanced go-to-market planning and pricing strategy. Many early-stage companies also struggle to balance innovation with sustainable business models. Startups must design solutions that integrate seamlessly into existing systems while delivering measurable value. Investors should favor ventures that address real pain points, offer clear ROI, and align with complex healthcare workflows.
MEDKAP’s investment approach is defined by industry focus, geographic openness, and technology-enabled processes like AI-assisted due diligence. Its model allows smaller investors to participate through syndication and prioritizes working closely with startup founders to improve market readiness and commercial viability. It invests in early-stage startups with strong founding teams (particularly commercial or scientific leaders), clear go-to-market strategies, and realistic exit planning (e.g., strategic acquisition over IPOs). A key emphasis is placed on minimising dilution, optimising timing, and creating a supportive ecosystem involving industry experts and service providers.
The paper presents healthtech as more than just an investment trend – it’s a societal shift – and it calls for strategic, informed and impact-driven investment. For forward-thinking investors, now is the time to engage in this revolution and contribute to reshaping how healthcare is delivered, accessed and scaled globally.
To download the report, visit www.medkap.org.
