Hello, and welcome to the Brydon Health blog, Our Take on Health Tech. We explore broad trends we discover while meeting with healthcare technology companies, often diving into specific topics that matter to leaders in our space. We hope you find this valuable and continue to read along.
The M&A Question Every Healthcare CEO Faces
As Chief Product Officer at NeuroFlow, a mental health technology company, I was tapped by the CEO to lead our mergers and acquisitions (M&A) strategy. At first, I was skeptical—I was focused on organic growth through our core roadmap. But then I remembered words from my favorite product leader, Elad Gil: "Most companies wait too long before making their first acquisition."
In healthcare, this timing question is especially complex. Beyond financial and strategic fit, you need your target company to align on security, mission, and technology. So when is the right time?
Three Critical M&A Moments
1. Early Stage (Series A-B)
Consider acquiring other companies when lacking critical market-entry capabilities or when rapid competitor consolidation threatens survival. However, conducting M&A as an early startup is relatively rare.
2. Growth Stage (Bootstrapped or Series B-C+)
M&A becomes especially attractive when you've hit market saturation in core segments, face prohibitive customer acquisition costs, or encounter platform limitations that would require massive R&D investment versus acquiring existing solutions. At NeuroFlow, our first acquisition of Capital Solution Design (CSD)—which I led end-to-end—focused on customer acquisition costs, as we bought a company with pre-existing VA contracts.
3. Market Timing
Regulatory changes creating consolidation opportunities, technology shifts requiring new capabilities (AI, cybersecurity), or favorable capital conditions can trigger M&A consideration. We're currently in a period of rapid technical innovation, so opportunities abound.
Where the Action Is
Today, acquirers prioritize companies with strong data assets and proprietary technology, evidenced by billion-dollar deals for platforms with large user bases (e.g., CentralReach and Alto Pharmacy).
Digital health is heating up with a fascinating trend: "tapestry weaving"—healthtech startups acquiring other healthtech startups. In Q1 2025, 67% of M&A deals involved digital health companies buying peers, up from 53% in 2024. Examples include H1 purchasing Ribbon Health, Hone Health purchasing Ivee, and Hims & Hers acquiring Trybe Labs.
Another significant trend: 20-30% of deals are now driven by distressed companies seeking exits due to financial pressures, investor fatigue, and consolidation needs following the pandemic-era funding boom.
Consider how these trends and tailwinds could make M&A sensible for smaller, bootstrapped, or early-stage companies too.
Why Buy vs. Build?
Healthcare companies choose M&A for several compelling reasons:
- Roadmap acceleration: Building capabilities takes 3-5 years; acquisition provides immediate market presence (though integrating new capabilities still requires time)
- Regulatory shortcuts: Acquiring existing FDA approvals or HIPAA-compliant infrastructure can save years
- Customer relationships: Healthcare buyers are risk-averse and sticky—existing relationships provide instant credibility and growth opportunities
- Scale economics: Healthcare has high fixed costs; M&A can spread these across larger revenue bases more efficiently
- Defensive positioning: When competitors consolidate, staying independent often becomes unsustainable
At NeuroFlow, our primary motivation was acquiring customer relationships, but we also dramatically increased roadmap speed and scale across four target company acquisitions. Some brought new algorithms, IP, and analytics capabilities; others contributed technical infrastructure; and some added complementary services to our technical offerings.
Getting It Right
Having successfully completed four M&A transactions at NeuroFlow, I've learned quite a bit about sourcing, transacting, and integrating. Here are the essential elements:
Strategic sourcing: Find acquisition targets through continuous relationship building. The best deals happen through existing networks—several of our acquisitions were nurtured at industry conferences.
Rigorous selection: When evaluating fit, we focused on customer overlap, technology compatibility, HIPAA compliance, service quality, and cultural alignment—especially critical in mission-driven healthcare environments.
Careful integration: Starting during due diligence (not after closing), we built go-to-market plans, roadmaps, and organizational charts. Healthcare integrations take 50-100% longer than typical software M&A due to regulatory requirements and customer sensitivity.
I'm extremely proud of NeuroFlow's M&A strategy, especially our CSD acquisition. After only a few years as a combined entity, contracts have grown exponentially due to sales alignment, complementary technology and security capabilities, team scaling, and strategic roadmap integration.
The Bottom Line
Healthcare M&A isn't just about growth—it's often about survival in an increasingly consolidated market. The key is treating it as a specialized discipline aligned with your company's core growth and R&D strategies, requiring deep domain expertise and extended timelines.
What stage is your company at, and what strategic challenges are you facing? Have you considered M&A yet? We'd love to hear from you.