The authors are involved in building MEDKAP, KAPSLY, and the Healthechpark. This article describes the rationale behind that work.
Why the MedTech Investment Climate Is So Difficult
MedTech has long been regarded as a resilient growth sector, benefiting from demographic tailwinds, medical innovation, and relatively defensive demand. Yet in recent years, professional investors have faced an unusually hostile environment across all three of the world’s largest MedTech markets: Europe, the United States, and China.
In Europe, the introduction of the EU Medical Device Regulation (MDR) and In Vitro Diagnostic Regulation (IVDR) has significantly increased regulatory complexity, cost, and uncertainty. Multiple industry surveys and EU‐commissioned studies show that companies are delaying or cancelling product launches, shrinking portfolios, and reducing innovation activity as certification timelines lengthen and notified‐body capacity remains constrained [1][2][3]. An EU‐commissioned study cited by RAPS found that more than half of medical device companies reduced product portfolios because of MDR/IVDR burdens, while some exited device categories altogether [4].
In the United States, the regulatory bottleneck has shifted from stringency to capacity. Staffing cuts and operational strain at the FDA’s Center for Devices and Radiological Health (CDRH) have materially slowed review timelines for novel and complex devices, according to multiple industry and media reports [5][6]. Legal experts and industry groups warn that approval delays of “months if not years” are becoming more common, particularly for AI‐enabled or first‐of‐kind technologies [7].
Commercial conditions in the U.S. have also tightened. Hospitals and payers face budget pressure, procurement departments have become more price‐sensitive, and tariffs and supply‐chain disruptions have further compressed margins for device manufacturers [8][9].
In China, access to the world’s second‐largest MedTech market remains possible but far less attractive than a decade ago. Volume‐Based Procurement (VBP) programs have driven price reductions of up to 70–90% in certain high‐value device categories, fundamentally altering the economics for multinational and innovative players [10]. At the same time, opaque procurement processes, strong government control, and “Buy China” industrial policies have increased uncertainty for foreign startups and investors [11][12].
Against this backdrop, caused by regulatory friction in Europe, institutional slowdown and pricing pressure in the U.S., and state‐driven price control in China, it is reasonable to ask: how do professional investors still find good MedTech startup opportunities?
How Professional Investors Continue to Find Attractive MedTech Opportunities
Despite the headwinds, experienced MedTech investors have not exited the sector. Instead, they have become more selective, more analytical, and more operationally focused. Interviews, surveys, and investor commentaries consistently show a shift from broad thematic bets to deep, company‐specific diligence [13][14].
1. Focusing on Regulatory and Reimbursement Feasibility Early
One of the clearest lessons from the past decade is that regulatory approval alone is insufficient. Studies from Stanford Biodesign and industry analyses show that many FDA‐approved devices fail commercially due to lack of reimbursement, poor workflow fit, or weak post‐market evidence [15].
As a result, professional investors now scrutinize:
- Regulatory pathway clarity (e.g. well‐defined 510(k) predicates or realistic MDR transition plans),
- Reimbursement readiness, including coding strategy and payer relevance,
- Clinical evidence plans that extend beyond minimum approval requirements.
Startups that integrate regulatory, clinical, and reimbursement strategies from the outset are consistently viewed as lower‐risk investments [15][16].
2. Prioritising Teams With Proven Execution Experience
Across investor interviews and VC analyses, management quality remains the single most decisive factor in MedTech investing. Greenlight Guru’s 2025 investor webinar recap highlights that VCs consistently prioritize leadership teams with prior MedTech exits, regulatory experience, and the ability to navigate setbacks [17].
This reflects MedTech’s long development cycles and capital intensity. Investors favour teams that have already navigated FDA interactions, clinical trials, manufacturing scale‐up, and hospital procurement, because execution risk often outweighs technology risk.
3. Looking for Capital Efficiency and Milestone Discipline
Higher interest rates and fewer exits have made capital efficiency a central investment criterion. Deloitte’s analysis of the MedTech investment landscape shows that investors increasingly favour startups that can achieve value‐inflecting milestones with limited capital, often through staged development or strategic partnerships [18].
Key KPIs commonly scrutinized include:
- Cash runway,
- Cost per regulatory milestone (e.g. clearance, CE mark),
- Time‐to‐clinical or time‐to‐revenue.
From this data, a key metric for MedTech investors can be calculated:
- Capital Efficiency to Next Value Inflection Point
It is calculated as follows: “cumulative cash burn until milestone.”
Its meaning is: “How efficiently does the company convert capital into regulatory, clinical, or commercial value creation?”
This is extremely relevant because the value of MedTech startups is primarily created through risk reduction [19]. Achieving regulatory milestones, securing reimbursement, and meeting clinical study endpoints drive valuation, while significant revenues are often only expected much later. Accordingly, MedTech startup investors typically do not ask, “When will you reach revenues of x?”but rather, “How much capital do you need to significantly reduce the technical, regulatory, or clinical risk?” As funding cycles lengthen and follow‐on capital becomes less certain [20], being able to answer this question is crucial for MedTech startups seeking funding.
4. Targeting Segments Less Exposed to Price Compression
Professional investors are also reallocating capital toward MedTech sub‐segments that are structurally less exposed to pricing pressure. Venture capital trend analyses show continued interest in:
- AI‐enabled diagnostics and remote monitoring, where clinical differentiation can be strong and clinical workflows are improved,
- Robotics and digital‐enabled devices, particularly collaborative systems and devices that augment existing robots and systems,
- Specialty and orphan indications, which are less exposed to volume‐based procurement [21].
- Neuro diagnostics and stimulation, particularly non-invasive, non-implantable technologies.
These areas still face regulatory hurdles, but investors perceive better long‐term pricing power and strategic acquisition interest.
5. Using Alternative Deal Structures to Manage Risk
Finally, investors are adapting how they invest. Deloitte and AdvaMed highlight the rise of build‐to‐buy, co‐development, and structured partnership models in MedTech [16][18]. These approaches allow strategic players and financial investors to:
- De‐risk early‐stage innovation,
- Align incentives with future acquirers,
- Provide startups with non‐dilutive resources and commercial validation.
Such models are becoming increasingly important in a market where IPO exits are rare and traditional venture rounds are harder to syndicate. In Switzerland, though, due to the lack of potential acquirers within the country, such alternative deal-structures are rarely seen as of yet.
Summary
The MedTech investment environment is undeniably challenging. Regulatory overload in Europe, institutional strain and pricing pressure in the U.S., and state‐driven cost controls in China have reshaped risk profiles across the sector. Yet professional investors continue to find attractive opportunities by changing how they invest, not by abandoning MedTech altogether.
They focus on regulatory and reimbursement realism, back experienced teams, demand capital discipline, concentrate on defensible niches, and increasingly rely on alternative deal structures. In doing so, they treat today’s environment not as a reason to retreat, but as a filter – one that removes weaker projects and leaves a smaller, but more investable, set of MedTech startups.
Closing Remark
Switzerland offers many of the right ingredients: talent, funding, IP strength and regulatory clarity. Yet capitalizing on this moment will take more than favorable trends. Angels, VCs, corporates and public actors must work together to turn scientific and entrepreneurial promise into companies that scale – and stay. The window is open.
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About the authors
Gido Karges: Gido Karges is a highly accomplished executive, strategist, and investor with over two decades of leadership experience in the medical technology sector. He is widely recognized for his expertise in navigating the complexities of high-tech industries, specializing in MedTech innovation, regulatory compliance, and market access. Gido was awarded the “HealthTech Business Angel of the Year 2025” by the MEDKAP investor association in recognition of his significant contributions to the early-stage healthcare ecosystem. He previously served as the CEO of Straub Medical AG for over 14 years, where he led the company’s transformation from a scale-up into a global international group. During his tenure at Straub Medical, he successfully accompanied the company’s strategic acquisition by Becton Dickinson (BD) in 2020, ensuring a seamless transition and global market expansion for its vascular technologies.
Strategist & Investor
