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Digital health acquisitions crawl despite consolidation conditions

Data: Rock Health; Chart: Axios Visuals

Despite market conditions that tend to favor consolidation, 2023 saw fewer digital health acquisitions than 2022 and 2021, a Rock Health report finds.

Why it matters: A closed IPO market and reduced access to capital should have ushered in more digital health mergers — something analysts and employers have begun welcoming of late given the proliferation of myriad point solutions.

Zoom in: Lower acquisition activity has thus far meant that some digital health companies must shutter altogether, including, for example, prescription digital therapeutics developer Pear, fertility startup Bunni, addiction treatment provider Halcyon, and telemental health provider Hurdle.

Yes, but: Asset acquisitions and relaunches are still occurring, the analysts note, and regular acquisitions may also be percolating, albeit at a slower pace than expected.

  • "Anecdotally, we’ve heard that some digital health startups today are rounding up acquisition offers, oftentimes alongside their VC term sheets, in order to put all the options on the table," they say.

Of note: Some recent digital health asset transfers include, for example...

The bottom line: "With patient and consumer data changing hands and treatment programs hanging in the balance, the stakes have never been higher for seamless integration and continuance of high-value care delivery," the analysts note.

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