Nelson Advisors predictions on what’s to come in European HealthTech and MedTech in H2 2026

Executive Summary
  
The first half of 2026 confirmed the thesis we set out last December: European HealthTech and MedTech are transitioning from a volume-driven market into a value-driven one. Fewer companies are being funded, but the survivors are being funded harder; fewer deals are being signed, but the ones that close are larger, more strategic and increasingly organised around a single question, who owns defensible, clinically validated artificial intelligence. 
  
We enter the second half of the year with a market that is quieter on the surface and structurally more active underneath.
  
Our headline call for H2 2026 is that the “bigger cheques, fewer bets” dynamic accelerates. We expect European digital health venture funding to remain well below its 2021–2022 peak in deal count, while average round sizes continue to climb and late-stage capital concentrates in a narrow band of category leaders. 
  
On the M&A side, we anticipate a busier second half than first, driven by strategic carve-outs, private-equity buy-and-build platforms, and incumbents using their balance sheets and compliance infrastructure to acquire innovation they can no longer afford to build slowly. The regulatory picture, meanwhile, has shifted in a way that materially changes deal timing, and we think most market participants have not yet fully priced it in.
  
This report sets out ten predictions across capital markets, M&A, artificial intelligence, regulation, sub-sectors, private equity and geography, followed by the principal risks to our view and the strategic actions we believe founders, acquirers and sponsors should take before year-end.
  
The H1 2026 Backdrop
  
Any credible forecast has to start from where the market actually is, and the numbers from the first quarter frame the picture cleanly. European digital health venture funding reached roughly $1.2 Billion across 67 deals in Q1 2026, a decline of around 44% in capital deployed and 46% in deal count against the same period in 2025. On its own that reads as a market in retreat. But the average deal size rose to approximately $21 million, up 8% year-on-year and three mega-rounds of $100 Million or more closed in the quarter, led by Oviva’s $235 Million Series D, Alan’s $116 Million Series G and DentalMonitoring’s $100 Million Series D. 
  
This is not a market that has run out of capital; it is a market that has become far more selective about where capital goes.

The exit environment tells a complementary story. Thirteen European exit transactions in Q1 2026 carried roughly $552 million in disclosed value, led by Kaia Health at $285 Million and Gleamer at $267 Million. Patient Solutions captured the largest share of new capital at around $298 Million, with Medical Diagnostics close behind and cardiovascular, diabetes and nutrition-focused ventures attracting the deepest therapeutic funding. 
  
The signal is consistent: money is flowing to categories with clear reimbursement pathways, demonstrable clinical outcomes and a credible route to either scaled commercialisation or strategic exit.
  
The broader market context remains genuinely large. Europe’s digital health market generated an estimated $130 Billion in revenue in 2025 and is projected to compound at roughly 10% annually toward $314 Billion by 2034, while the European HealthTech market specifically is forecast to grow at an 18% CAGR from around $97 Billion in 2025 toward $222 Billion by 2030. Underneath a soft funding headline sits a structurally expanding end-market. That gap between subdued private financing and robust underlying demand is precisely the condition under which strategic and sponsor acquirers move and it is the foundation for most of what follows.

Click here to read the report https://www.healthcare.digital/single-post/halfway-through-2026-nelson-advisors-predictions-on-what-s-to-come-in-european-healthtech-and-medte