In 2025, the telemedicine sector continued to consolidate – as our report analyzing the year shows. M&A activity rebounded sharply, with 87 deals driven largely by large US consolidators’ efforts, confirming the country's continued dominance in the space. Fundraising activity on volume increased by 107% year-on-year, driven by Pre-Seed/Seed and Later-stage investments, with nearly two-thirds of these deals being US companies. A dual trend emerged in 2025, combining sustained early-stage innovation focusing on AI driven by continued Pre-Seed/Seed activity with increasing capital concentration and consolidation among scaled players.
As the market matures, investors remain supportive of innovation at inception, while favoring established platforms with scale, recurring revenues, and clear paths to profitability, which leverage funding and M&A to build integrated, end-to-end telemedicine offerings and strengthen their market positions. EV/Revenue multiples have increased for four consecutive quarters, rising from 2.7x in H1 2024 to 3.9x in H2 2025.
Telemedicine enters 2026 shaped by AI disruption and transition to multifunctional platforms
For 2026, our expert team has identified several key industry dynamics, including:
- AI is scaling rapidly in healthcare and is increasingly positioned as “physician augmentation”, automating documentation, triage, and decision support to unlock productivity and capacity. The ultimate goal consists of introducing productivity gains in healthcare delivery to halt the historic conundrum of medical costs inflation (GenAI healthcare market projected from $2.7bn in 2024 to $17bn by 2034, 20% CAGR).
- The aging population is structurally increasing healthcare demand, with the 55+ cohort rising from 20% of the global population in 2024 to 23% by 2034 (world population growing from 8.2bn to 8.8bn).
- Telemedicine’s economics remain highly sensitive to public reimbursement and regulatory frameworks, meaning policy shifts and uneven implementation across countries can quickly impact eligible volumes, pricing, and care pathways – making regulatory instability a structural sector risk.
- Mental health remains one of the most resilient growth vectors in digital health, supported by structurally rising demand and broadening employer coverage (~90% of employers offered mental health coverage in 2024).
Christophe Morvan, Managing Partner at Drake Star, summarized the developments: “Telemedicine is entering a new phase: the market is shifting from standalone telemedicine products to fully integrated, patient-centric platforms (‘mega-apps’) that cover the entire care journey. This shift is largely being driven by consolidation across formerly fragmented verticals – fewer point solutions, more end-to-end players, enabled by AI solutions.”
For more insights into developments in the industry, market data as well as a market map listing relevant players in the field, outstanding M&A deals and fundraising activity, download the full report here:
