Good morning, ! It’s Thursday and we’re diving into the sports medicine market, uninsured population by urbanization level, and AI enabled startups have reached almost 40% of total healthcare funding.

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DATA DIVE

Data Dive: Sports Medicine’s Investment Surge

Sports medicine is shedding its "elite athlete" roots and going mainstream, and investors are taking notice. Projected to nearly double from $5.89B in 2023 to $10.82B by 2033, the sector is riding a potent mix of aging demographics, fitness culture, and tech-driven care models.

North America leads the charge, commanding 47% of the global market, but Europe and APAC are fast followers. Private equity interest is especially sharp around outpatient rehab, MSK tech platforms, and roll-up opportunities in fragmented sports rehab chains.

The market’s structure is unusually top-heavy: Arthrex and Smith & Nephew control over 60% of global share. Yet the remaining 39% remains wide open for consolidation plays, digital disruption, and vertically integrated care models.

Meanwhile, common injury patterns, sprains (30%), knee injuries (20%), and hamstring strains (16%), are creating scalable demand for outpatient care, remote rehab tech, and bundled MSK services. Sports-specific injury data (cycling, basketball, baseball) adds another layer of targeting precision for capital allocators. (Read or Listen to Full Report)

TREND OF THE WEEK

Healthcare M&A Surge? Services Still Reign Supreme

Healthcare Services continues to dominate the M&A landscape in 2024, accounting for 413 of the 816 reported healthcare deals in Q1 alone. That’s more than 50% of all activity, making it the most active subsector by far.

Trailing behind: Pharmaceuticals & Biotechnology with 194 deals, followed by Healthcare Devices & Supplies (108) and Healthcare Technology Systems (101).

This concentration reflects a continued appetite among sponsors and strategics for scalable, platform-based care delivery models, especially as outpatient and home-based services gain traction. Meanwhile, biotech activity remains resilient despite market volatility, and tech-driven systems still face cautious investor scrutiny due to integration challenges and valuation resets.

For dealmakers, this trend underscores a clear takeaway: services aren’t just stable, they’re hot. Expect competition to remain fierce as private equity firms hunt for assets with revenue visibility, reimbursement resilience, and bolt-on potential. (More)

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MARKET MOVERS

HEALTHTECH CORNER

AI’s Wallet Share in HealthTech Hits a Growth Spurt

Artificial Intelligence has quietly moved from sidekick to star player in health tech funding. While total AI investment stayed flat, AI’s share of the digital health pie has been steadily expanding since 2017, especially after a noticeable inflection point in 2021. Investors are betting that AI will drive diagnostics, operations, and personalized care—even as broader health tech dollars wobble. In today’s selective capital environment, AI isn't just surviving; it's thriving, minting the next generation of healthcare unicorns. If you’re a healthcare exec still treating AI like a side project, good luck playing catch-up. (More)

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DEAL OF THE WEEK

Merck Snaps Up SpringWorks in $3.9B Rare Disease Play

Merck KGaA is beefing up its biotech arsenal, agreeing to buy SpringWorks Therapeutics for nearly $3.9 billion. The German pharma giant will pay $47 a share in cash — a 26% premium over SpringWorks’ 20-day trading average — betting big on rare disease and cancer therapies. The deal immediately sharpens Merck’s focus on rare tumors and expands its U.S. footprint just as the biotech M&A market heats up. Merck expects the acquisition to add revenue on Day 1 and become EPS accretive by 2027, a rare biotech deal that promises short-term sugar and long-term protein. Closing is slated for H2 2025, pending the usual shareholder and regulatory hurdles. CEO Belén Garijo is clear: this isn’t just bolt-on growth — it’s a power move to turn Merck into a full-stack innovation and technology powerhouse. (More)

REGIONAL FOCUS

Rural Divide: Health Insurance Gaps Persist Outside the City Limits

New data highlights a persistent truth in U.S. healthcare: where you live still shapes your access to coverage.  Nonmetropolitan areas have some of the highest uninsured rates in the country, 13.9% of adults (18–64) and 5.5% of children (0–17) lack health insurance, matching or exceeding rates in large central metros.

While urban cores face their own challenges, rural communities consistently fall behind on coverage, a gap that widens when it comes to children. Compare that to large fringe metros, where just 10.1% of adults and 4.0% of kids are uninsured.

This isn’t just a policy talking point. Uninsured rates shape healthcare outcomes, provider access, and financial strain on rural hospitals, many of which operate on razor-thin margins or are at risk of closure. (More)

INTERESTING ARTICLES

Why are value based deals shaping the industry?

Why are hospitals freezing M&A deals?

Are private equities running away from physician deals?

"Your most unhappy customers are your greatest source of learning."

Bill Gates