What forces are shaping the Medtech and Healthtech landscape in 2025? How are investors and firms navigating the current funding environment? What revolutionary innovations could the future hold?

These were some of the questions put to a panel of expert speakers at Medtech and Healthtech in Focus, a recent event we co-hosted with Goodwin.

In this blog, we dive into some of the highlights of the discussion.

You can also watch the full conversation here.

It's no surprise that artificial intelligence is dominating the latest conversations in Medtech and Healthtech.

AI and machine learning are now central to innovation in new devices and digital platforms, even at the earliest stages of development.

Here are some of the ways that impact is being felt:

AI-augmented platforms

Robotics, for example, is playing an increasingly important role not only in surgery, but within specialties such as cardiovascular and endovascular care.

Data collection

AI is transforming how patient data is being captured, in settings ranging from clinical trials, to real-time monitoring in the home, to robotic surgery and telemetry.

Precision medicine and personalised care

How much use is all that data if you can't do anything with it? AI is unlocking analytics capabilities that could lead to more personalised, effective care, such as targeted oncology that seeks to identify underlying drivers of disease.

Drug discovery

AI is unlocking targets once considered 'undruggable' with legacy systems. Google DeepMind has already shown what's possible with AlphaFold, its tool for predicting protein structures, whose developers received a Nobel Prize.

If you're a Medtech or Healthtech founder in 2025, you're faced with a challenging funding environment.

As Michael White, our Head of Life Sciences and Healthcare, noted in his opening remarks at Medtech and Healthtech in Focus, the industry is on course to set a record for the sector for investment². In the UK and Nordics specifically, investment value is up, although there have been fewer deals, in keeping with an overall shift towards a more selective investment environment³.

This is compounded by the fact that companies developing generative models in Healthtech and Medtech need higher computing power, which demands more capital.

The obstacles are clear and undeniable. So, how can your startup prepare to overcome them?

The first step is to prepare for targeted questions from investors that zero in on issues like technical and legal diligence.

Data security and privacy, for example, are attracting more scrutiny. This is triggering increasingly sophisticated queries about tools like generative AI models and the data sets they rely on.

This is clearly a positive trend. However, it also demands more from founders in terms of knowing every nuance of your business and giving strong answers to probing questions.

During times of unpredictability, there's clear value in having a long-term investment partner that can help you ride out volatility in the market.

This is particularly relevant in Medtech and Healthtech, where investors tend to be more mission-oriented and the innovations businesses are working on need time to deliver value.

Expectations of what can be achieved within one round of funding are rising. It's also becoming less and less likely that investors will settle for incremental success, particularly in light of other clinical, technical and possibly legal risk they might be taking on.

So, as a founder, the key question to ask about your business is: What can you achieve with the cash you have now?

This marks a change from even a couple of years ago, when there was more potential for firms to raise capital multiple times and benefit from crossover rounds.

As John Cassidy, Director of Life Sciences and Healthtech at SoftBank Investment Advisers pointed out at the event, companies could previously raise at an uptick as they moved towards a true inflection point or because some time had passed.

"In contrast to now, you have to assume that the next round isn’t coming, and so you have to deliver everything that you think is going to drive value within the financing that you are raising now or at least as far as you possibly can, as people aren’t going to pay for incremental growth."

The US continues to lead Europe in the Medtech and Healthtech space. There are clear reasons for that – the most important being that it's a single market with one regulator, which simplifies compliance.

On a purely practical level, the US is also the market that drives the most value in this sector⁴, and it's home to the deepest pools of specialist capital.

However, there is cause for optimism when looking at the current industry picture in Europe, particularly when it comes to innovation and the number of new businesses emerging.

A common challenge many of these startups face is the compliance burden in Europe and the UK, created by a patchwork of regulatory bodies across different markets.

There was broad agreement between our expert speakers that, to close the gap on the US, Europe needs to address this issue.

What will be the next transformative moment in Medtech and Healthtech, after which the industry will never be the same again?

It's a big question, and one that got some fascinating responses from our panel, giving us a glimpse of where the sector could be headed in the coming years.

Here are a few highlights from their predictions:

Connected, AI-driven home monitoring technologies: A system that operates in the home, collects patient data in real time and links to a centralised healthcare system could revolutionise early diagnostics, preventative care and treatment.

A fully unified patient record system: Data such as scans, tests and clinical markers being captured, standardised and instantly accessible within one record could be a breakthrough moment that enables more effective care and interventions.

Using AI to cure a disease: AI has already raised productivity and efficiency in drug discovery. Is it simply a matter of time before it invents a novel drug, treatment or cure?

Removing the need for animal testing: AI could again have a key role to play here, potentially by identifying drugs that aren't toxic but still require human trials, eliminating the need to test pre-clinical candidates on animals.

With AI fuelling innovation, a challenging funding environment and the potential for shifting dynamics between global markets, 2025 is proving to be an interesting year for Medtech and Healthtech. The sector has hurdles to overcome, but it's also edging towards breakthroughs that could redefine patient care worldwide.

For your startup to grow and capitalise on opportunities in this space, effective support and solutions from reliable partners will be crucial.