Our newest Telemedicine Report covers key takeaways from 2024, such as a rebound in transactions, a maturing industry landscape, and stabilizing valuation multiples as weaker players exited and discipline returned. The analysis also dives deep into Q1 2025, including relevant M&A deals, key fundraising trends, and our outlook for the rest of 2025. We believe key driving forces will be AI transformation (from simple video tools to intelligent care orchestration systems), strategic acquisitions in the space, rising regulatory and legal pressures, and market recalibration. For all the details our experts have compiled, download the full report at the bottom of the page.

2024 Recap: M&A Recovers, Fundraising Shifts and Valuations Multiples flatten out

M&A activity in the Telemedicine sector saw a notable resurgence in 2024, with 53 deals completed – a clear recovery from the 42 transactions recorded in 2023. This growth was largely driven by the U.S. market, which experienced a 31% year-over-year increase, significantly outpacing Europe’s more moderate 15% rise.

Deal activity in telemedicine is increasingly led by major players, highlighted by standout acquisitions such as LetsGetChecked’s €480m acquisition of Truepill and GTCR’s €166m acquisition of Cloudbreak Health. While fundraising volume dropped 19% year-over-year, the average deal size rose to €15.8 million, signaling a shift toward later-stage investments in established companies.

The market is being shaped by two key forces: consolidation and a reallocation of capital toward profitable businesses, both driven by macroeconomic pressures and a maturing industry landscape. Valuation multiples stabilized for the first time in three years, rising from 2.7x to 3.2x, as weaker players exited and discipline returned.

With early-stage funding drying up, only resilient companies are securing investment. The result is a leaner, more stable sector – now driven by fundamentals over hype.

Christophe Morvan, Managing Partner at Drake Star, said: “The telemedicine market is clearly transitioning into a new phase of maturity. Following the hypergrowth of the COVID era and a sharp post-pandemic correction, 2024 shows signs of stabilization – in deal activity, in valuations, and in strategic focus. Investors are no longer chasing growth at all costs, but rather looking for proven, resilient business models. In short: 2024 is not a return to exuberance, but the emergence of a more disciplined, value-driven market.”

Looking ahead: AI-Driven Innovation and Strategic Acquisitions to shape Telemedicine in 2025

Artificial intelligence is rapidly transforming telemedicine, evolving platforms from simple video tools into intelligent care orchestration systems. To stay ahead, major players are making strategic acquisitions to secure proprietary algorithms, AI talent, and advanced clinical workflows. With the upcoming EU AI Act and tighter FDA oversight, 2025 will bring increased regulatory pressure, requiring providers to scale with caution.

M&A strategies are shifting – the most attractive targets will be those that embed AI across their platforms to drive efficiency, automation, and scalability. Stryker’s acquisition of Care.ai reflects this shift, aiming to enhance hospital workflows through AI-powered monitoring.

In the U.S., fragmented state laws are creating compliance hurdles for cross-border providers, raising the risk of federal regulatory intervention. At the same time, the industry is moving toward vertical integration, expanding into pharmacy services and embedding tech solutions within clinical environments. Public sector adoption is accelerating this trend, aiming for seamless, unified systems for both providers and patients.

Lawrence Giesen, Partner at Drake Star, commented: “The integration of artificial intelligence into healthcare and particularly into telemedicine is one of the most transformative trends shaping the sector in 2025. AI is no longer seen as an add-on feature; it's becoming central to competitive advantage, operational efficiency, and clinical differentiation.”

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