Health Tech M&A on the Horizon: Consolidation Expected in 2025
The UK’s health tech sector is poised for significant consolidation in the coming years. Rising pressures on healthcare providers, coupled with increased NHS spending, are creating an environment ripe for mergers and acquisitions (M&A).
Tom Whicher, CEO of DrDoctor, a UK patient engagement platform, believes the market is ready for this shift. He emphasizes the need for fewer, larger organizations capable of delivering substantial value to the NHS.
Whicher notes that the post-COVID NHS is prioritizing solutions that address specific challenges rather than chasing “cool tech.” The recent government budget, which allocated over £2 billion for NHS technology and digital improvements, has further invigorated investor interest.
DrDoctor, backed by investors including Ananda Impact Ventures, 24Haymarket, and YFM Equity Partners, is actively working to transform healthcare access and delivery. Whicher recently discussed the evolving health tech landscape, the potential for consolidation, and DrDoctor’s role in this transformation.
Market Maturation and the Push for Consolidation
Nick Herbert: Why is the market ripe for consolidation?
Tom Whicher: The market has matured significantly. We’ve moved from a period of rapid health tech startup growth to a phase where clear leaders are emerging. Many companies have proven their technology’s effectiveness, but scaling within the NHS presents a unique challenge. NHS organizations are increasingly favoring comprehensive platforms over fragmented solutions, creating opportunities for mergers and acquisitions to build broader offerings.
Key Areas for M&A Activity
NH: Where do you see the most M&A activity?
TW: Admin automation is a key area. Bringing functionalities together improves efficiency and user experience. Initially, EPR vendors drove NHS digitalization, followed by patient-facing apps. Now, the focus is on integrating these across various care settings, including mental health.
Investment Trends
NH: Will this be driven by corporate buyers or private equity?
TW: Both. Large US and European corporates are showing increasing interest in the NHS, while private equity firms are backing roll-ups in the space. Investors are regaining confidence, particularly with the rise in NHS budgets for digital productivity. The strong dollar makes the UK health sector an attractive value proposition for US investors.
NH: Is capital readily available?
TW: Yes. Private equity firms have significant undeployed capital and are actively seeking opportunities. Health tech offers relatively stable returns, even in economic downturns. Our business continues to grow at a healthy rate (30-40% per annum).
NH: How is government policy influencing this trend?
TW: Government funding to reduce waiting lists underscores the important role technology plays. The new 10-year Health Plan, set to roll out after April, focuses on digital transformation. It emphasizes moving care from hospitals to community settings, transitioning from analogue to digital, and shifting from treatment to prevention—all priorities supported by technology.
DrDoctor’s Strategy
NH: Where does DrDoctor fit into this landscape?
TW: Our strategy is platform-focused. We’re already the largest player in our category, supporting over 40% of NHS outpatient activity. Last year, we acquired a mental health-focused product and are open to further acquisitions that align with our mission.
NH: Are you looking for investors?
TW: Currently, we are focusing on organic growth, but we anticipate engaging with growth-stage investors in early 2026. Investors that want to take the business to the next level. Having a scale and delivering lots of value is important in optimising financial metrics. Investors are looking for positive EBITDA.
NH: What’s your outlook for the sector?
TW: We predict that three to five major patient-facing platforms will dominate the NHS over the next few years. The companies driving system-wide change need scale, which is why consolidation will continue. It’s an exciting time for health tech and DrDoctor intends to be at the forefront of that transformation.
