As economic difficulties continue to impact the healthcare sector, experts predict that 2023 will be another slow year for the IPO market. However, the consolidation deals will continue, according to a new report from Health tech geeksan information platform focused on the healthcare business.
To gather expert predictions for what this year will look like for the healthcare sector, Health Tech Nerds polled 90 executives and investors of digital healthcare startups. Nearly two-thirds of those surveyed said they think two or fewer health technology companies will go public in 2023.
The survey found that there were several companies that participants thought had the potential to go public this year, with 11% betting on a virtual care company Health included and 10% said starting chronic care management Omada Hello. Participants mentioned several other startups including Ro, Health of the sword, Hinge health and Aledade.
Notably, most of the companies respondents thought could go public in 2023 are focused on enabling people to receive care and manage their health from their homes. This highlights the rise of the home health movement in the industry.
Regarding consolidation, respondents predicted that CVS will make the most notable acquisition in the healthcare sector this year. When participants were asked what they thought was most meaningful acquisition deals will be in 2023, CVS was mentioned in about 29% of responses. For the healthcare retail giant, respondents identified the following primary care-focused companies as acquisition targets: Privia Hello, Aledade, Agilon Health, Cano Health, Oak Street Health and Carbon health.
The study participants predicted this Amazon and Optum will be the other two largest buyers in the healthcare sector, with 10% and 8% of respondents, respectively, mentioning these companies in potential deals. Amazon’s acquisition targets include Color, Walgreens and Smile Digital Healthand Optum’s goals are Headspace Health, Send Hello and Turquoise healthaccording to the report.
In addition to the digital health companies Amazon could buy, some respondents also predicted the tech giant would buy a payer in 2023. There was speculation that Amazon will one day acquire an insurer when the company announces its own $4 billion purchase on One medical last year, and 32% of survey respondents said this type of deal could materialize this year.
As for newer startups that require further development before they can consider an IPO or acquisition, next year is likely to be financially challenging from a fundraising perspective, according to the report. However, the survey participants predicted that start-ups focused on the delivery of care will still receive significant investment from venture capitalists this year. Among care startups, respondents said specialty care and virtual care are likely to garner the most investment.
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