Healthcare Private Equity Focuses on Digital Investments in 2025
Global, Sunday, 12 January 2025.
Bain & Company’s 2025 report reveals a surge in digital and AI-driven healthcare investments, highlighting a shift toward technology-centric models that enhance efficiency and patient care.
Record-Breaking Investment Levels
The healthcare private equity sector demonstrated remarkable strength in 2024, reaching an estimated $115 billion in deal value, marking the second-highest total on record [1][4]. This surge was particularly notable in digital health and AI-driven solutions, with North America leading the charge at 65% of global deal value, followed by Europe at 22% and Asia-Pacific at 12% [2]. Five transactions exceeded $5 billion in 2024, up from just two in 2023, indicating growing investor confidence in large-scale healthcare transformation [1][2].
Digital Health and IT Innovation
Healthcare IT dealmaking showed significant recovery in 2024, driven by financial pressures on providers and investments in core systems for efficiency [2]. Notable transactions included Cotiviti’s recapitalization, valued at approximately $11 billion [2]. The sector has seen particular emphasis on revenue cycle management, workforce planning solutions, and patient engagement platforms [3]. Generative AI is emerging as a transformative force in healthcare IT, though investment opportunities specifically relying on AI remain selective [2].
Mid-Market Success in Digital Transformation
Mid-market healthcare funds have shown remarkable adaptability, with fund-raising increasing by approximately 40% over the past three years, totaling around $59 billion since 2022 [3]. These funds have successfully pivoted toward digital health investments, particularly in healthcare IT and provider services [3]. The trend is exemplified by strategic investments such as GI Partners’ acquisition of eClinical Solutions, reflecting the sector’s move toward enhanced digital infrastructure [5].
Future Outlook and Strategic Shifts
Looking ahead, the healthcare private equity landscape shows promising signs for continued digital investment growth. According to Nirad Jain, partner at Bain & Company, ‘We are optimistic about the outlook for healthcare private equity in the year ahead, particularly as deal multiples begin to plateau’ [4]. The sector is expected to see increased focus on value creation through digital transformation, with particular emphasis on AI integration and operational efficiency improvements [2][3].