Healthcare is typically perceived as a very slow-moving industry. This can be attributed to the strict regulations that medical devices need to adhere to, as well as a resistance to change. As mentioned by Erik Rask, Founder and CEO, MedBeat: “A lot of people in the medical industry, they work on the concept of, ‘if it ain't broken, don’t fix it.’"

These attitudes can make the industry feel slow-moving, but taking a look into the startups innovating within the space, you will realise that these younger companies are anything but.

Even though the industry may be slower than others to move forward than some others, it is still incredibly successful and constantly growing. According to EY’s 'Pulse of the MedTech Industry Report 2024', medtech has recorded its sixth successive year of unbroken top-line growth, and it is now a $587 billion industry. The industry is continuing to develop and innovate, with 2023 showing a record number of FDA product authorisations.

The key sub-categories in the medtech industry are:

• Diagnostic imaging: MRI, CT scans, and ultrasound machines
• In Vitro Diagnostics (IVD): blood tests, molecular diagnostics, and point-of-care testing kits
• Cardiovascular devices: pacemakers, stents, and implantable monitors
• Orthopaedic and prosthetic devices: joint replacements, spinal implants, and robotic surgical systems
• Digital health technologies: AI-powered diagnostics, telemedicine platforms, health apps, and digital therapeutics

The European medtech market

Europe’s medtech market was estimated at roughly €160 billion in 2023 and is estimated to make up 26.1% of the world market.

According to MedTech Europe’s Facts & Figures 2024, there are more than 37,000 medical technology companies in Europe. Small and medium-sized companies make up around 90& of the medtech industry, the majority of which employs less than 50 people.

In Europe, the highest number of medtech companies are based in Germany, followed by Italy, the UK, Poland, Sweden, and Switzerland.

The industry is huge, and its potential is staggering. With a drive for better accessible technology, and human lifespans getting longer, the interest in medtech innovations is only growing.

Funding

The medtech industry is doing well when it comes to funding, but let’s take a look at the 2024 funding landscape.

A review of investment trends for medical device companies in 2024 revealed renewed momentum at the early and late ends of the commercialisation journey, while companies in the mid-stage faced a more difficult landscape.

Early-stage funding and merger and acquisition (M&A) activity saw notable increases compared to 2023, however, late-stage investments grew at a more modest pace and were often marked by reduced valuations.

After a sluggish first half of the year for M&A activity, medical device companies experienced a strong rebound in Q3, closing 2024 with 14 major acquisitions, according to the HSBC Venture Healthcare Report.

This same report found that in 2024, total venture investment in medical devices reached $7.5 billion across 421 deals. This marked 15% increase from the $6.5 billion raised in 2023 across 430 deals. Despite this overall growth, the market displayed a clear concentration of capital among established, commercial-ready companies, with the top 10% of deals accounting for 60% of total investment.

Early-stage investment in medical devices grew significantly in 2024, with total first-financing reaching $971 million across 106 deals – up 34% from $726 million across 105 deals in 2023.

Late-stage rounds (Series B and beyond) expanded at a more modest pace, with a reduced number of deals compared to the previous year. In 2024, 315 deals raised $6.5 billion, slightly down from 325 deals raising $5.8 billion in 2023.

Series C and later rounds recorded the slowest growth and faced considerable valuation pressure, with two-thirds of deals closing at flat or reduced valuations.

The technologies driving the industry

With advanced technologies driving the world forward, medtech is no exception to the impact of these technologies.

As with most industries, AI and machine learning are driving the sector in many ways, including analysing imaging data, predictive capabilities, and enhancing diagnosis. An impact study commissioned by MedTech Europe and written by Deloitte found that the potential impact of AI could lead to significant positive outcomes for healthcare systems. It could save 400,000 lives yearly, account for a whopping €200 billion in annual savings, and would free up to 1.8 billion working hours every year – the equivalent of having half a million additional full-time healthcare professionals.

The use of robotics within the medtech industry is also bringing the medical industry to the forefront of a technological revolution that will have a life-changing impact on patients. Two of the startups in this issue are working within this space. Moon Surgical has developed a robot that helps surgeons with minimally invasive laparoscopy operations in order to free up more hands during surgery and allowing more of these operations to go ahead. Robeauté has developed microrobots – smaller than a grain of rice – to navigate the brain's complex structures. These devices aim to diagnose, treat, and monitor neurological conditions with minimal invasiveness.

Since the COVID pandemic, the industry has gone from strength to strength, after people realised how much technology could truly help people’s lives. Watching the industry develop and seeing the life-changing technologies that are being announced to the world feels hopeful that one day the things that ail humans will be things of the past.

This article originally appeared in the May/June 2025 issue of Startups Magazine. Click here to subscribe