MedTech Venture, Partnership, and M&A Trends Through Q2 2025

By Chris Dokomajilar, CEO & Founder of DealForma

Note: This is an edited transcript from the MedTech Summit talk Chris presented on July 8, 2025.

We'll take an outside perspective and look at what has happened over the past few years in terms of venture funding—the ups and downs around that—partnerships, M&A activity, and all that.

It's great to keep in touch with the community, not just in SaaS and tech, but in MedTech. I was excited to join this discussion. It's great to be talking to folks outside of biopharma, which I spend probably 90-95% of my time on calls with—biopharma companies, therapeutics, drug discovery companies, investment banks around that part of the industry.

But in MedTech, it's a really good interface of software and information, which is really what we do, applying that to humans and to medical technologies, especially diagnostics and medical devices directly. We track all that in our database.

About the DealForma Database

I'll be talking to you today using data from the DealForma database. I founded DealForma in 2017, after about 15 years working in management consulting and other data shops, basically around life sciences. Prior to that, I was a scientific researcher at the University of California in San Francisco.

What I had seen over the years is that there was initially this firewall between academia and industry. Around 2003-2005, more and more academic labs started working with biotech companies and pharmaceutical companies in research partnerships. Those advanced further and further along, and nowadays it's almost a very smooth transition.

Having seen the business side of things early on, I joined a firm that tracked partnerships and helped companies form license partnerships with pharma companies. We tracked all those licenses and read a lot of contracts—small ones start out as 20-page documents in legalese and have grown to 200 and 300-page documents with multiple different attachments.

We started out tracking the deals between companies and over the years expanded that to tracking not just partnerships but acquisitions of companies, venture funding, product pipelines (especially on the therapeutic side), and the intent of companies as well.

We now have the DealForma database. This is one of a few that are out there—we didn't reinvent something, but we'd like to think, and we hear from clients, that we've done a better job, especially in the specific areas that we focus on.

We initially started filling it up in 2017, and I wanted 10 years of data to go back to 2008, company by company, year by year. We scanned and searched for all the press releases and investor reports, company presentations, SEC filings to gather all the data and source documents for all these partnerships that are formed.

Now we're at 39,000 deals covered. Those have all been manually curated into the database by our team of 16 people on a full-time basis. We create profiles on a daily basis and quality check all those. We really push data quality and the usability of the data, so you get a good feel for the filters you're using and a good picture of benchmarks, deal comps, investor due diligence, or company due diligence if you want to see what other companies they're invested in.

Apart from deals, we track funding rounds themselves—40,000 companies and investors and all the ecosystem around that. We track drug sales figures, product sales figures, and product pipelines.

Healthcare and Life Sciences Venture Activity: Some Good News

I wanted to start with something good. Ever since 2021-22, we have seen venture come way down. It was coming down from a very high point, I could say that. But as mentioned in other data presented, a lot of things just wound down. Investment slowed down. They became much harder to get signed.

I think of it in terms of gears getting stuck. It wasn't just that venture decided to stop investing—the IPOs stopped happening, or they took longer. The large M&As stopped happening (that started even before 2021), and then the risk appetite completely dried up. We're in a very risky business. It's a seven to 10-year product development timeline. In therapeutics, you commonly hear about billion and multi-billion dollar investments into R&D to get a single drug out. Lots of failures—you have to fail a lot in product development. But that's also true at big companies.

In terms of startup life sciences companies in general, it all really started in 2017—that big ramp up in venture funding coming across, up to 2021 right after COVID, during COVID. A lot of investor money poured in. A lot of generalist investor money poured in on the public markets as well. We tend to focus more on private deal making, and also with bigger pharmas (those are public).

$44 billion came into biopharma therapeutics and platforms. This is in venture money. Stack up MedTech and HealthTech on top of that to bring us close to $90 billion coming in terms of investments—1,200 rounds just last year. As we wound down things, close to $50 billion down from that $90 billion high point.

This year, at the half-year mark, the data I'll be presenting is coming right off of last week, so everything will be timed by the end of June 30. At the halfway mark here, we're at $23 billion invested into the broader healthcare and life sciences space, including biopharma therapeutics, which brings in about $11.3 billion of that.

When you count in HealthTech and MedTech, we're sitting a little bit better than the midpoint of last year. I do think that MedTech is saving it, and the drawdowns have been steeper in biopharma therapeutics.

Where a lot of the rounds that do get invested—there are many fewer of them—the dollars that are being deployed are in much more advanced rounds, much more advanced companies, and larger check sizes. But on the flip side, it's to fewer companies.

The top 11 MedTech rounds for this year so far include BVI Medical and Neuralink—some headline companies there with huge rounds. A billion dollars for BVI, $650 million in a Series E for Neuralink. These are all very advanced stages except for Lila Sciences, which formed out of Flagship Pioneering, bringing in AI tooling for drug discovery.

MedTech Funding Breakdown

Getting into it—I mentioned the large funding rounds. MedTech is doing well, considering everything. We're at $12.1 billion in venture funding through 413 rounds of funding altogether. $7.1 billion of that was in the first quarter, and second quarter was definitely lighter. That's echoed not just in MedTech, but in biopharma on the other charts that we run.

Large deals and large funding rounds are happening—32 of these are hundred-million-dollar investments or larger, and 27 more are $50 million or larger. Those two numbers at the half-year mark are decent, especially on the large size. Large rounds are happening, but the downside is that those are large rounds into fewer companies.

Much fewer early-stage seed and Series A rounds are coming out, and it's tougher to get a biopharma and life sciences startup company off the ground nowadays, especially in the last two or three years. Investors are focused on things that are quicker through initial R&D, closer to market, more of a sure thing—being a lot more risk averse because the exits are not as frequent. In order to have that whole calculus work out, the exits have to happen as well as the good investments.

Partnerships and Licensing Activity

Switching gears out of venture, we're looking at partnerships and service contracts and licensing. In this area, we're looking at HealthTech, SaaS contracts, acquisitions, and M&A being very active. We track licensing more than other types of deals, just because there's more to dig into there.

Across the board, not just in MedTech and HealthTech, but licensing R&D partnerships are down a bit this half versus H2 of last year—324 deals there. But M&A is making up for it. There's a lot of activity there, and companies are being acquired, just not at the largest dollar values that we used to see.

What's making up for a lot of this is SaaS and service contracts. There's a shift in companies that were previously developing in-house technologies for their own pipeline, into more of a SaaS model where they would offer service contracts. Take AI drug discovery, for example—using that tooling and that technology across many companies.

Those deals are worked out a little bit differently. They're more contract driven, more upfront payment driven than typical product development, licensing commercialization deals, which have a bit upfront (about 10 to 14% upfront) and then the headline number in a total of milestones and sales milestones and royalties.

To close out the half year: just over 2,000 deals altogether, $237 billion across the board, and $98 billion of that is in upfront money. That's against $191 billion from the full year last year.

Notable Deals

Some big numbers and big names. On the service contract deals, the big upfront dollar value deals include $230 million in a joint venture that Hologen and Meiragtx gene therapy company put together to develop Hologen Neuro AI. It's a JV focused on applying AI models to neurological diseases—all sorts of CNS diseases.

More on the device plays: auto-injectors and drug delivery technology. You'll see a lot of medical device deals in government contracts with the military. Both of those are DOD and Health and Human Services deals. The radiation monitoring software deal was with the Navy from Thermo Fisher—a giant company. On the smaller end, Creyon with Lilly—giant pharma company—signing an AI RNA targeted therapy deal to apply their technology to discover new therapies. Also a deal with DARPA from Portal Bio.

Acquisitions on the large end: Siemens acquiring Dotmatics for $5 billion—digital twin software, which is super cool. We've seen that in other areas, not just in MedTech, but in industrial production. Then more medical device plays with Stryker, Zimmer, and McKesson, for example.

We often have to deal with non-disclosure of information. Typically companies will send out the flashy press release, but it won't have all of the financials disclosed for various reasons. We do a lot of updates forwards and backwards to dig for more data as it becomes available, through SEC filings if companies are public or if they're going public and their S-1s.

Therapeutic Areas and Technology Focus

Both MedTech deal making, contracts, and venture funding—we tend to look at those across technologies, technology platforms, and therapeutic areas of focus. In terms of venture investment, neuro and cardiovascular are bringing in a ton of money, a large share of investment. Those have huge needs and unmet needs, both in terms of MedTech (where there are a lot of huge applications) and in terms of therapeutics. $4.7 billion going into neuro in the past 18 months, $4.4 billion into cardiovascular, both in diagnostics and devices. Then oncology, which typically always leads in terms of deal making for just the sheer number of companies working in that space.

On the equivalent from deal making from contracts and licensing, I'm looking at upfront cash. Think of upfront payments as your non-dilutive capital. Those are payments upfront, not driven by milestones or anything, but just at the initiation of deals typically, for committed money. Oncology is bringing in $288 million in the medical device space, in the MedTech space here.

If we were looking at biopharma therapeutics, you'd probably add a zero to all these numbers, where the deals are much larger upfront. Typically, you'll see oncology deals, even in early stages of development and clinical development, with a median of about $50 million upfront for a clinical program or even a preclinical program. On the large end, it's not unheard of nowadays to find multiple deals with a hundred million or more upfront, as part of multi-billion dollar, multi-year partnerships with a large pharma company.

But in MedTech: oncology, neuro, and endocrine are the top three.

M&A Activity

Another area where deal flow is still happening is in acquisitions. I think for various reasons, there are a lot of companies where the time is right for them to be acquired. The public markets have been very tough, both on MedTech and biopharma companies. A lot of companies are trading below cash.

There are a lot of M&A deals happening at very small financial figures. The upfronts are down, the total values are down. Typically, some of these deals will also have contingent payments and milestone-based structures on these buyouts as well.

142 deals have happened just in this quarter alone, across biopharma and MedTech. $32 billion at the top end, $28.4 billion in terms of upfront commitment. The share of these deals—roughly about 20% of these deals that are announced are biopharma therapeutics companies, and 80% of them are in various types of MedTech and HealthTech. From devices, diagnostics, all the way up to health services and IT, and clinical management that we track as well.

Out of the close to $89 billion in this first half, $29.4 billion of that is in MedTech. Just this quarter alone, $13 billion in acquisitions—you saw a couple of those on the large end in the table I showed earlier. Biopharma is about $19.5 billion. So both are roughly close in total, but one thing to note is that this is 111 deals in MedTech versus 31 deals in biopharma. The deals are much larger for biopharma, but they're many fewer of them.

Outlook for the Rest of 2025

This slide I always include at the end of my presentations, and folks ask about it at various points of the year. There's probably a little more clarity at the beginning of the year, and there's more optimism.

In terms of MedTech and HealthTech, with what we've seen in the shift in venture funding from early stage into later stage companies, from small rounds into much larger rounds with fewer of them, it's this concentration on companies that are looking more promising than ever. They're going to be closer to market with whatever they're developing—whether it's a device or diagnostic or a therapeutic—closer to IPO or closer to an M&A exit.

If you go back and look at the funds that were raised in the free-flowing capital period, many of those venture funds have cycles—5, 7, 10-year cycles. If a lot of that money didn't get invested early on and got held back, there's still a lot of dry capital to invest, but that has to get compressed into companies that will exit or hit wild success a lot sooner. Much more risk averse than it was before.

Biopharma—big pharma companies, biotech companies—will be doing more SaaS-type deals, more so than typical licensing-type deals that we've seen for the past 50 years. You'll see deals for services more compartmentalized, contracts rather than multi-year 5, 10, 15-year partnerships to develop a product. Get a tool or get a service done and move on to the next thing. Typical SaaS deals, which are shorter lived, but also good for the providers and the service companies because a lot of that money is committed upfront.

M&A will be active. I think we'll still see a lot of companies get acquired. It's just not going to be at the high dollar value. In biopharma, right now we're sitting roughly around where a good deal would be between a billion and $2 billion for the acquisition. If you looked at that five years ago, it was like $19 billion to $20 billion as a mega merger. So one to $2 billion on the biopharma side will continue. We'll have a couple of larger deals come in as well.

MedTech is doing all right in terms of acquisitions. Again, there are a lot of deals that are happening. It's just going to be for companies that are at smaller numbers.

Q&A

Q: I assume if you are a founder who's about to sign some sort of deal, DealForma would be a great place to get a comp on what that might look like in the market. Is that right?

A: Yeah, we work with a lot of companies just getting formed out of academic labs, companies that are getting those research grants, companies that are going out for funding at seed and Series A stage. We work with them and help to build that relationship to stay with them for a long time. We've seen a lot of clients that have gone to the second and third stage where now they're doing deals with larger companies and getting larger funding.

For more information and to access DealForma's deal database, visit dealforma.com. They offer a subscription database platform where you can search for different types of deals and dig into the nuance of deal structures and financials.

Disclosure: John Knox has a small financial interest in DealForma.