When M&A Rains, IPOs Drizzle

The digital health exit landscape hit a major milestone in 2025 with tech-enabled care delivery companies Hinge Health and Omada Health breaking the recent IPO hiatus. But while the public markets grab headlines, the real action is happening in M&A, with 107 deals closed in H1 2025 putting this year on track to nearly double the 121 M&A deals recorded in 2024. Digital health companies continue to be the most frequent acquirers of other digital health companies, accounting for 63% of all deals as they execute what's being called the "tapestry weaving" playbook, acquiring new capabilities to create more robust offerings. Meanwhile, private equity players are banking on a fascinating new roll-up strategy: combining AI-native startups with legacy healthcare players, betting that established distribution networks and trusted services merged with cutting-edge technology will drive meaningful efficiency and scale gains. Through these roll-ups, PE firms are effectively underwriting the shift from legacy healthcare services to AI-powered solutions, creating important test cases for buy versus build strategies that will determine whether this approach to inorganic growth can deliver long-term success.