Private equity puts $18.4 bn into US healthtech deals

Private equity firms put $18.4 billion into 72 U.S. healthtech transactions in the first half of 2026, according to a Nixon Peabody report cited by Benzinga on Oct. 28.

That nearly matched the $18.2 billion across 160 deals recorded for all of 2025, showing capital has shifted toward fewer, larger assets rather than a broad rebound.

The law firm’s report said the average buyout size rose to $3.4 billion in the first half from $760 million in 2025. If the first-half pace held, full-year value could approach $37 billion, almost twice last year’s total, the report said.

“These dynamics describe a market that is maturing and bifurcating rather than retreating,” the Nixon Peabody report said, referring to the split between firms able to fund large transactions and smaller buyers facing harder capital-raising conditions.

Artificial intelligence is becoming a larger part of the healthtech investment case, according to the report. It said deal volume involving both AI and healthtech more than doubled in 2025 and was on track to reach a new annual high in 2026.

The areas drawing investor attention include administrative automation and clinical decision-support tools, the report said. Examples include revenue-cycle management, insurance approvals, billing and coding, medical documentation and analytics that assess patient risk.

Add-on acquisitions, in which a sponsor buys smaller companies to expand an existing platform, accounted for nearly 80% of healthtech buyout activity by deal count in the first half. The report said the value of those add-ons had already exceeded the 2025 total by more than 60%.

The pattern reflects a wider private-markets environment in which capital has become more concentrated. Healthtech and health care-focused funds raised $3.5 billion in the first half, down from a $60.3 billion peak in 2021, with experienced firms taking 87% of the 2026 capital, the report said.

Exit conditions remain a constraint. Healthtech private equity exits generated $7.6 billion across nine transactions in the first half, while the report said a durable reopening of the IPO market had not yet taken hold.

Regulatory scrutiny is also complicating roll-up strategies, the report said, using the term for buying multiple businesses in the same sector to build scale. Regulators are looking at competition, data privacy, AI governance and ownership of medical practices, according to the report.

In September, Sen. Elizabeth Warren and Rep. Alexandria Ocasio-Cortez introduced the Stop Corporate Takeovers of Physicians Act, which would bar private equity firms, insurers and other for-profit corporations from owning or controlling physician practices, Benzinga reported.

The Nixon Peabody report said regulators are examining the cumulative effects of serial acquisitions, including effects on local market concentration, pricing and patient access.

Atlas360 reported Oct. 21 that LevinPro HC data showed private equity-backed buyers still accounted for about one-third of announced health care M&A in the third quarter, even as overall sponsor-backed deal volume fell to 135 transactions.

Source: report, Nixon Peabody, October 2026; article, Benzinga, Oct. 28, 2026