As one of the largest and most important industries in the world, healthcare is top of mind for many dealmakers when crafting their investment strategies. But one of the challenges of investing in the industry is its highly fragmented nature. Healthcare has countless sub-sectors, each with its own nuances that can make breaking into the industry somewhat daunting.
Unfortunately, another challenge currently facing healthcare investors is low deal volume. Bain & Company reported that, for the first 10 months of 2024, deal volume in healthcare M&A was 28% lower compared to the same period in 2023. However, companies that managed to make an investment saw more than 40x higher stakeholder returns (12.2% vs 0.3% growth), according to the same report.
Last but not least, sellers’ expectations of the buy-side to bring deep domain expertise and sector-specific resources to the table are increasing. To succeed in such a diverse and highly competitive industry, private equity organizations must narrow their theses and become more specialized.
Luckily, there are countless healthcare sub-sectors where dealmakers can carve their niche and succeed. For those firms still looking for the perfect fit, here are some healthcare sub-sectors worth paying attention to in 2025 — and some fast-growing bootstrapped players in each.
For every prevalent healthcare sub-sector — such as medical technology, pharmaceuticals, and laboratory medicine — there are countless others worth investigating. We’ve identified five that show considerable promise in the coming years, as well as three of the fastest-growing private companies for each.
The number of people 65 and over in the US grew nearly five times faster than the total population over the past century, according to the 2020 Census. This means demand for anti-aging products and treatments is increasing, and while this healthcare sub-sector is relatively small compared to some others, it is growing quickly.
In fact, according to Statista, the global anti-aging market is expected to grow more than 150% between 2024 and 2032, from $50.1 billion to $78.7 billion worldwide.
Anti-wrinkle products alone are expected to grow at a rate of 9.1% CAGR to $26.1 billion by 2030, according to Grand View Research. With more than a third of the overall market share alone, Asia Pacific holds the largest share and generates the most revenue. However, Spain is forecasted to grow the most over the next six years, and could offer great opportunities for firms interested in the industry.
Everything from general skincare and hair care products to anti-obesity and anti-pigmentation treatments is considered part of the anti-aging industry. It also includes more extreme options such as plastic surgery and medical devices, like biostimulators that treat aging skin.
While this means there are many exciting angles and proprietary opportunities for dealmakers to explore, it also means more work is required to refine their investment theses. Simply focusing on "anti-aging companies" is too broad and will likely return too many results. Thorough, in-depth market research and mapping is especially critical to be successful in this sub-sector.
Balanced Bodies Anti-Aging Clinic
In addition to providing high-quality, innovative anti-aging therapies to promote optimal levels of health and well-being for clients, the Balanced Bodies Anti-Aging Clinic also offers a complete line of professional grade supplements that are non-GMO and vegan certified through its online store.
A female-founded anti-aging wellness company, Winona, Inc. produces products that help women deal with menopause and sleep. Its offerings include preventive care; testosterone for women; treatments for mood, anxiety, and depression; hormone replacement therapy; anti-aging; and weight gain.
This anti-aging clinic specializes in bioidentical hormone therapy and complete hormone replacement therapy (HRT) for men and women to promote healthy aging, sexual wellness, and long-term well-being. In addition to HRT, Core Medical Group's services include peptide therapy, nutrient IV therapy, medical aesthetics, and medical weight loss.
Before discussing the market itself, it's important to first understand that there are two types of diabetes: Type 1 and Type 2. Type 1 diabetes is generally found in younger people, and is caused by the body not producing insulin. In contrast, Type 2 diabetes usually occurs later in life (adults over 40), and is chiefly attributed to family history and obesity. Rather than not produce insulin at all, Type 2 diabetics are instead resistant to the insulin their bodies produce.
Type 1 and Type 2 diabetes affects approximately 14.7% of the population (47.1 million people), according to the latest information from the US Center for Disease Control (CDC). For those over 65, the percentage of cases nearly doubles to 29.2%. The large number of cases is partially attributed to the now-rampant access to less healthful, high-in-sugar processed foods, as well as increasingly sedentary lifestyles.
As more people are affected by diabetes every year, the market grows larger with companies attempting to curb the spread of the disease as well as improve treatment options. In fact, the Type 1 diabetes market is expected to grow at a CAGR of 6.2% to $24.4 billion by 2031, according to Coherent Market Insights. Similarly, the Type 2 market is expected to grow at a CAGR of 5.64% to $42.8 billion by 2033, according to a report by IMARC.
Forecasted growth has not yet taken into account the unexpected efficacy and popularity of GLP-1 drugs (e.g., Ozempic). As such, the market is likely poised to grow much more than previously predicted. Firms that wish to take advantage of this growth must act now or risk losing out.
Alternatively, private equity organizations that wish to focus on biotech should take note of its many recent advancements, especially related to insulin delivery. For example, digital insulin pens can now deliver more than just the necessary drug, they can also keep better track of insulin usage. This helps doctors and practitioners monitor the efficacy of pen usage, leading to more effective and personalized Type 1 treatment plans.
The same is true for Type 2 "smart" insulin pumps and glucose monitors. These innovative machines help further personalize patient treatment options while offering more convenient options to manage the disease.
Dia-Log the Insulin for Your Soul
Rather than focus on diabetes medication, Dia-log the Insulin for Your Soul was created to support the entire diabetic lifestyle by easing the mental strain of having diabetes. The company helps diabetics learn how to thrive and live their best and healthiest lives by transforming their diabetes management through self-care activities, participating in a like-minded community, and following healthful food and exercise routines.
Dialog Healthcare is a hospital and healthcare company that augments the diabetes care and treatment of long-term care and rehabilitation facilities. It provides safe, effective and compassionate care for diabetics and focuses on improving their quality of life and reducing hospital re-admissions while at the facility.
A direct-to-consumer diabetic supply company, Lincoln Health Supply offers continuous glucose monitors (CGMs) to help patients better control and manage their diabetes on a daily basis. The company offers services for both patients and providers to streamline care and communication.
Similar to the healthcare industry as a whole, the neurology and neuroscience sub-sector itself is expansive, with companies that focus on a wide range of diseases and treatments. Some aim to advance rehabilitation therapies for events such as strokes, while others research treatments for diseases such as Alzheimer's and muscular dystrophy.
Biotech also has a large footprint in this sub-sector, helping to develop innovative devices such as brain-computer interfaces (BCIs) and nanotech. Neurosurgery and older (but still widely used) tech such as MRIs and CAT-Scans serve as the backbone of the industry, and is an area where AI has helped to rapidly advance techniques and treatments. AI-assisted robotic surgeries are increasingly prevalent, helping doctors make more informed decisions throughout the treatment process as well as assisting during operations with incredibly precise controls.
As a result of the innovation across the industry, the neurology and neuroscience market is expected to reach $71.0 billion by 2032, with a CAGR of 5.6%, according to a report by Introspective Market Research. North America is expected to continue to dominate the industry and further expand its 34% market share over the forecast period.
One of the biggest challenges in the neuroscience industry is its focus: the human brain. In the US alone, regulations have historically been extremely strict regarding what companies could do. For many years, human trials were completely banned, drastically limiting the research and development of technology such as BCIs.
However, in 2021, the FDA approved the BCI, Ipsihand, designed to aid patients' rehabilitation from strokes. The US agency then lifted its restrictions on human trials, paving the way for more medical technology companies to comprehensively test their devices, research the effects, and make advancements.
This led to an explosion of other BCIs in the market. One example is Cognixion, which received the FDA Breakthrough Device Designation for its augmented reality (AR) BCI designed to assist patients with advanced diseases to communicate via thoughts and mental attention.
Even with relaxed regulations, however, the industry still faces intense scrutiny. Informed consent, specifically, is one of the largest concerns for those operating within the sector, as most surgeries are incredibly invasive and patients cannot always vouch for themselves or fully understand treatment effects. Additionally, many have concerns about data privacy.
That said, for private equity organizations willing to brace the ethical concerns surrounding the sub-sector, the industry offers great potential, especially as it’s able to harness breakthroughs, such as AI, from other industries.
Premier Medical Associates All Florida, LLC
A full-service medical practice, Premier Medical provides specialists in neurology, endocrinology, physical therapy, and gynecology, among others. The practice offers innovative services such as screening and tests for diabetic neuropathy, state-of-the-art CT scans, and nuclear stress testing services that enables patients to obtain quality in-house medical testing services to accommodate their active lifestyles.
HermanScience, formerly RemotelyMe, is a Veteran-owned business dedicated to helping organizations reduce human and insider threat risks by offering security, compliance, and talent assessments embedded into interactive escape room gamification training courses. The company leverages proprietary visual neuroscience and cognitive AI to reliably predict behavioral risks for Gen AI misuse, security incidents, disengagement, retention, and more.
A biotech company that conducts phenotypic drug discovery in-house, AfaSci discovers and develops peptide and small molecule therapies for unmet needs in the fields of pain and neurology. The company's services include pre-clinical tests based on cognitive, sleep monitoring and deprivation, depression, epileptic convulsion, stroke, pharmacokinetics, analgesics, and electrophysiology, enabling scientists to develop tools and therapies to treat chronic pain and seizures.
Ophthalmology is another healthcare sub-sector that’s being affected by the aging US population, since age-related issues such as cataracts and glaucoma affect millions of people every year. According to the National Eye Institute, an estimated 38.7 million people will be affected by cataracts by 2030.
These issues are, of course, in addition to those that also affect the wider population, such as refractive errors (e.g., nearsightedness, farsightedness, astigmatism). In fact, it's estimated that up to half of adults 20 years of age and older have eyes with refractive errors.
It should come as no surprise, then, that the ophthalmology industry will reach $130.7 billion by 2032, up from $78 billion in 2024, at a CAGR of 6.7%, according to Data Bridge Market Research. With such prevalent and long-lasting issues driving the industry, private equity organizations may find the sector to be less risky than others.
As with many other industries with rapid growth, ophthalmology suffers from a lack of skilled workers. Hiring practitioners and doctors is a top concern for healthcare facilities and hospitals, while hiring researchers and developers for the technology sector of the industry is high-priority for those businesses.
Nevertheless, knowledge of the different illnesses and treatments within ophthalmology is rising among the population. Preventive care, such as annual check-ups, is also helping to raise awareness about potential issues and reduce the need for corrective treatments. This means the industry is becoming more innovative and adopting more advanced technology, such as intraocular lenses, at a much faster rate.
Revival Health, LLC is a software company that specializes in eliminating time-consuming manual tasks through automation. The company focuses on Ophthalmology and Optometry practices, and helps medical teams more quickly identify patient insurance coverage and integrate the different systems in their tech stack.
Gateway Ophthalmology, PLLC is a healthcare company that specializes in treating cataracts, glaucoma, macular degeneration, diabetic eye disease, and dry eye disease. It also provides laser vision correction and contact lens and glasses prescriptions for patients of all ages.
Aiken Ophthalmology, PC is an optical care company that provides eyewear products, eye care products, eye surgeries, and contact lenses to patients in and around the town of Aiken, South Carolina.
The last healthcare sub-sector on our list is, unsurprisingly, another industry that is being driven by our aging population. However, the orthopedics industry is also experiencing growth from the increasingly sedentary lifestyles and obesity rates of the larger population.
To put the orthopedic industry size into perspective, the orthopedic device market alone is expected to grow by a 3.1% CAGR to $80.8 billion by 2030, according to Grand View Research. Of the just over 8 billion people in the world, the World Health Organization estimates that 1.71 billion people worldwide suffer from a musculoskeletal disease.
Orthopedic implants provide recipients with the necessary bones and joints to continue living unimpeded. For the past two decades, however, smart implants have offered many additional benefits and continue to evolve as technology advances. For example, a knee replacement implant may measure range of motion and walking speed, steps, and other gait metrics to help the prescribing doctor ensure the knee is working properly.
The orthopedics industry is leading by example for other healthcare sub-sectors with regards to innovation. Orthopedic surgeons, for example, are using AI-powered robots to revolutionize surgeries. Ambulatory surgery centers, designed to offer same-day surgical options, usually have an orthopedics team, and are becoming a popular alternative to hospital-based surgical options.
However, another recurring theme in healthcare also affects orthopedics: The lack of a skilled workforce. It's estimated the orthopedic surgical workforce alone will fall about 5,080 surgeons short of demand, according to the Health Resources and Services Administration (HRSA), with only 91% of the market's needs sufficiently covered by 2035.
OrthoPediatrics Specialty Bracing (OPSB)
A manufacturer of orthopedic products, OrthoPediatrics Specialty Bracing (OPSB) focuses its efforts on pediatric orthopedic devices. The company offers hip abduction braces, pavlik harnesses, stompers, cervical collars, knee immobilizers, and support and cast boots.
Savas Health offers interdisciplinary clinical treatment options for patients, creating personalized plans and solutions that address each patient's unique situation and healthcare needs. The company's clinicians diagnose and treat orthopedic, complex, and persistent pain conditions to reduce patients' pain, improve function, and restore quality of life.
Neurosurgery, Orthopaedics and Spine Specialists (NOSS)
A medical practices company specializing in surgical and non-surgical techniques, NOSS helps patients return to optimal, pain-free function. The company provides neurosurgical and orthopedic care, spine treatment, sports medicine, joint replacement, and pain management services.
When dealing with an industry as vast as healthcare, it can be incredibly difficult for dealmakers to identify the right investment direction, much less up-and-coming companies within a chosen niche. Healthcare providers and companies also don't often pursue traditional marketing tactics, and can easily be hidden from public view, making deal sourcing even more difficult.
With a deal sourcing platform such as Sourcescrub, however, your dealmakers can easily map markets, research industries, and source potential investment opportunities. With the right tools at your side, you can learn what conferences are important to attend — and who's going — while pinpointing key contacts to build full agendas before ever stepping on the plane.
Want a sneak peek of what Sourcescrub has to offer? Here are the top healthcare conferences, where you might just land your next deal opportunity.
