Nelson Advisors 10 Key Reflections from Day One and Day Two at HLTH Europe 2026
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Two days into HLTH Europe 2026, the mood on the floor is more disciplined than exuberant. The conversations that matter to founders, investors are dealmakers have shifted decisively away from “what can AI do” toward “what will it underwrite”, durable margins, defensible data positions and regulatory tailwinds with real cash-flow consequences.
1. Capital is concentrating, not contracting.
The headline numbers reset expectations: global digital-health venture funding reached roughly $7.1Bn across 216 deals in Q1 2026, a modest c.7% year-on-year decline in value but an 83% jump in average deal size to c.$38.4M. Europe placed second with c.$1.16 Bn, behind a US that absorbed roughly three quarters of global capital.
The signal for sponsors is clear, fewer, larger, later-stage rounds, with early-stage names fighting harder for a shrinking pool. Conviction beats spray and pray.
2. The European Health Data Space is the structural thesis of the show.
EHDS has moved from policy slideware to an investable roadmap. Smart capital is flowing into the “plumbing”, consent management, data-flow and interoperability middleware that sits between legacy hospital EMRs and modern applications.
With most European providers technically unable to meet new data-fluidity requirements unaided, third-party translation layers become near-compulsory infrastructure. We expect this to be the most fertile ground for Series B+ buy-and-build over the next 18 months.
3. AI is now table stakes and that compresses the premium.
Every credible pitch assumes AI; almost none is differentiated by it alone. The practical consequence is a deflationary wave on thin “AI-wrapper” businesses, where investors are no longer paying a premium for capability that is rapidly commoditising. The repricing favours companies with proprietary data, clinical validation and workflow lock-in over those whose moat is a model they do not own.
4. The valuation regime has flipped from growth to profitability.
The clearest through-line across investor sessions is the move from top-line growth multiples toward a profit-weighted “Rule of 40” lens, EBITDA visibility, margin consistency and a credible path to cash generation. 2021-vintage marks are still working through the system, and we anticipate continued down-rounds, structured recapitalisations and insider-led extensions as the gap between last-round and clearing prices closes.
5. GLP-1s are reshaping the care model and the cap table.
Metabolic care remains the gravitational centre. Beyond the molecules, the value migration is toward the connected-care wrapper, adherence, monitoring and behaviour change and toward the shifting power dynamic between patients and providers.
For acquirers, this is a live convergence zone where pharma, payers and digital-health platforms are all circling the same assets, which should support competitive M&A processes.
6. “Shadow AI” is the new diligence line item.
Generative AI is entering clinical workflows faster than governance can follow, and unsanctioned “shadow AI” use is now an openly discussed operational risk. For investors this cuts two ways, it is a genuine liability to underwrite in diligence, and simultaneously a product category in its own right, as governance, audit and oversight tooling attracts strategic interest.
7. Liquidity pressure is forcing the exit conversation.
With the IPO window still narrow, the realistic path to liquidity runs through M&A. Founders and their backers are increasingly receptive to consolidation, and we see buy and build sponsors actively exploiting a fragmented European market, assembling platforms from sub-scale point solutions and targeting trade or sponsor exits. Expect process activity to pick up materially through H2.
8. Infrastructure beats apps for the patient capital.
A recurring investor refrain favours “picks-and-shovels” over front-end point solutions. Backend infrastructure, interoperability, identity, security and the data layer, offers stickier revenue and clearer defensibility than yet another patient-facing app competing for the same reimbursement and attention. Capital allocation is following that logic.
9. Prevention, longevity and “silvertech” are forming as a fundable category.
Demographic pressure is pushing prevention, care-at-home and ageing-population technology from theme to thesis. It remains earlier and more fragmented than the infrastructure trade, but it is attracting dedicated fund formation and strategic attention, one to track for early positioning rather than near-term scaled deployment.
10. Europe's regulatory tailwind is its edge and its exit depth is the question.
The transatlantic gap is the elephant in the room: the US still commands the lion’s share of capital, yet Europe’s EHDS-driven regulatory clarity is a genuine differentiator that US markets lack. The practical takeaway is that quality European assets look attractively priced relative to US comparables, which should keep cross-border strategics and global sponsors engaged, even as questions about European exit depth persist.
Nelson Advisors > European MedTech and HealthTech Investment Banking
Nelson Advisors specialise in Mergers and Acquisitions, Partnerships and Investments for Digital Health, HealthTech, Health IT, Consumer HealthTech, Healthcare Cybersecurity, Healthcare AI companies. www.nelsonadvisors.co.uk
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Meet Nelson Advisors @ 2026 Events
Digital Health Rewired > March 2026 > Birmingham, UK
NHS ConfedExpo > June 2026 > Manchester, UK
HLTH Europe > June 2026, Amsterdam, Netherlands
HIMSS AI in Healthcare > July 2026, New York, USA
Bits & Pretzels > September 2026, Munich, Germany
World Health Summit 2026 > October 2026, Berlin, Germany
HealthInvestor Healthcare Summit > October 2026, London, UK
HLTH USA 2026 > October 2026, USA
Barclays Health Elevate > October 2026, London, UK
Web Summit 2026 > November 2026, Lisbon, Portugal