The MedTech industry has long been fixated on in-year funding as the primary indicator of market health. While this metric provides a snapshot of capital flowing into the industry, it often falls short as a reliable indicator of business opportunity for MedTech service providers. This is because the funding allocated by MedTech companies for outsourcing is typically not spent immediately; instead, it is usually deployed 6 to 18 months after the initial receipt of financing. As a result, MedTech service providers face challenges in aligning their sales and marketing efforts with the timing of actual business opportunities. Relying solely on in-year funding data can lead to missed opportunities or misaligned strategies, highlighting the need for a more nuanced and forward-looking approach.
A more effective predictor of business opportunities emerges when in-year funding is paired with insights from the clinical trial pipeline. The clinical trial pipeline serves as a leading indicator of the demand for MedTech services, as trials signal where and when companies will require external support. By analyzing trends in clinical trial activity alongside funding patterns, service providers can better anticipate when MedTech companies will allocate resources for outsourcing. This dual analysis enables service providers to time their outreach and engagement strategies more effectively, capturing opportunities both within the current year and in the 18 months ahead.
Looking ahead, the combination of clinical trial pipeline trends and 2024 funding levels suggests a promising outlook for 2025. The MedTech market is projected to experience robust growth, creating significant opportunities for service providers. However, capitalizing on this potential will require a targeted and intentional approach to business development. Service providers who invest in understanding market dynamics, timing their outreach strategically, and tailoring their offerings to meet the evolving needs of MedTech companies will be well-positioned to thrive in this favourable market environment. With the right strategies in place, 2025 holds the potential to be a breakthrough year for MedTech service providers.
Figure 1 highlights the impressive quarter-over-quarter funding growth between 2023 and 2024, with increases ranging from a minimum of 40% to as high as 250% compared to the same quarters in the previous year. This substantial growth showcases a revitalization in the MedTech sector, signalling renewed investor confidence and a surge in financial resources being directed toward innovation and expansion within the industry. Such consistent and significant growth across consecutive quarters reflects a positive shift in market dynamics that could translate into notable business opportunities for industry stakeholders.
In total, funding in 2024 was 2.4 times greater than in 2023, marking a dramatic uptick in capital investment. This exponential increase underscores the accelerating pace of recovery and growth in the MedTech sector, reminiscent of the funding highs observed during the COVID-19 pandemic years. The pandemic era saw an unprecedented boom in MedTech investment as companies raced to meet urgent healthcare needs, and this recent surge suggests a return to similar levels of market vibrancy and activity. Such a strong funding environment lays the groundwork for expanded research, development, and outsourcing activities in the coming months and years.
For MedTech service providers, these funding trends point to a significant increase in business opportunities in 2025. However, realizing this potential will depend on their ability to strategically position themselves to engage with the right companies. Service providers must refine their business development efforts, leveraging insights into which companies are poised for growth and aligning their offerings with emerging market demands. By being proactive and intentional in their approach, service providers can capitalize on this wave of market growth, turning increased funding into tangible business opportunities and long-term success.
Figure 2 provides insight into how funding is being distributed across MedTech companies of varying sizes, as well as the shift in average deal sizes between 2023 and 2024. The average deal size saw a significant increase, jumping from $12 million in 2023 to $27 million in 2024. This indicates that larger investments are being made into individual MedTech companies, likely reflecting their increased financial needs for clinical validation and commercialization efforts, as highlighted in Figure 5. In contrast, earlier-stage MedTech companies, which are still in preclinical phases or earlier, require smaller amounts of funding. As a result, funding for preclinical-stage companies is distributed across a larger number of recipients, ensuring that more early-stage innovators can continue progressing toward commercialization.
Figure 2. A comparison of funding and funded MedTech companies between 2023 and 2024. A) Number of funded MedTech companies by employee range. B) Average transaction size of funding deals. C) Total funding amounts.
The distribution of funding also reveals that the majority of funded MedTech companies have fewer than 200 employees, significantly outnumbering those with larger teams. This is a logical trend, as smaller companies are typically pre-revenue or in the early stages of revenue generation, requiring external capital to fund their growth and operations. Larger companies, on the other hand, often generate sufficient revenue to sustain their activities and scale organically, minimizing their reliance on investment capital. These larger organizations are more likely to focus on mergers and acquisitions (M&A) as a growth strategy rather than seeking external funding.
For MedTech service providers, these trends carry strategic implications. Providers offering lower-cost services such as regulatory consulting, preclinical testing, quality assurance, and prototype design and development will have a larger pool of funded companies to target in 2025. With numerous smaller companies securing funding, the demand for cost-effective services is expected to grow. Meanwhile, Contract Research Organizations (CROs) and Contract Development and Manufacturing Organizations (CDMOs) will need to adopt a more targeted approach to their sales and marketing efforts. Although fewer companies with open projects received funding, the significantly higher average deal size suggests that these opportunities are likely to involve larger, more complex projects. By tailoring their strategies and aligning their offerings with these market dynamics, both types of service providers can position themselves for success in the evolving MedTech landscape.
Figure 3 highlights a critical insight into the timing of clinical trial opportunities, showing that these opportunities typically lag 6 to 12 months behind the initial cash injection into a MedTech company. This delay underscores the importance of looking at prior-year funding as a key indicator for current-year clinical trial opportunities, while in-year funding serves as an early signal for clinical opportunities in the following year. For Contract Research Organizations (CROs), this insight is particularly valuable, as it allows them to strategically align their business development efforts with anticipated demand, ensuring they are engaging with potential clients at the right time.
Figure 3. Number of MedTech clinical trials initiated in the past 6 years. All trials reference clinicaltrials.gov registries.
Given this correlation between funding and clinical trial activity, 2025 is shaping up to be a strong year for clinical trial projects, approaching the levels of growth seen during the peak COVID-19 pandemic year of 2022. With significant funding injected into the MedTech sector in 2024, the coming year is likely to witness a surge in demand for clinical trial services as companies move from earlier development phases into validation and commercialization. This projected growth presents a unique opportunity for service providers to capitalize on the increased activity by aligning their strategies with this upward trend.
In-year funding also serves as a useful indicator for smaller, more immediate projects, especially when paired with company size. For example, companies with fewer than 10 employees that secure $500K in funding are likely to spend it within the current year to achieve key preclinical milestones, such as developing regulatory and reimbursement strategies or advancing prototype development. These smaller projects provide near-term opportunities for service providers that cater to early-stage companies and can deliver cost-effective, targeted solutions.
For Contract Development and Manufacturing Organizations (CDMOs) and commercial service providers, this clinical trend offers valuable forecasting insights. By analyzing the timing of funding and its impact on clinical trial activity, these providers can anticipate business opportunities not just for 2025 but for the following years as well. Strategic planning based on these trends will enable them to position themselves effectively, ensuring they capture a share of the growing market as clinical trial activity continues to rise.
Mergers and acquisitions (M&A) volume serves as a high-level predictor of overall market health in the MedTech industry. This is largely because more than 80% of the market share is controlled by the top 10% of companies, including giants like Stryker, Johnson & Johnson, BD, and Medtronic. For most MedTech startups, acquisition represents the primary exit strategy, making M&A activity a key driver of innovation and growth. When M&A volume increases, it typically signals a strong market environment where larger companies are actively acquiring smaller, innovative players to bolster their portfolios and expand market share.
Figure 4. A comparison of the number of M&A counts (A) and number of patents approved (B) between 2023 (grey) and 2024 (yellow) broken down by quarter.
Conversely, patent volumes offer a glimpse into the early stages of the medical device pipeline and the market's overall level of innovation. A higher volume of patents reflects a dynamic and innovative industry, as companies race to develop new technologies and bring them to market. Together, M&A and patent volumes provide a comprehensive view of the MedTech ecosystem, from early-stage innovation to market consolidation.
Figure 4 reveals a slight increase in both M&A and patent volumes between 2023 and 2024. However, the relatively stagnant growth in these areas, despite a higher funding year in 2024 compared to 2023, suggests that much of the funding is being directed toward supporting existing patented medical technologies. Companies appear to be using these resources to push technologies through clinical validation and commercialization, as well as to maintain compliance with regulatory requirements such as the EU MDR (Medical Device Regulation) and IVDR (In Vitro Diagnostic Regulation). This trend highlights the intense focus on sustaining and advancing current technologies rather than driving new innovation.
The stagnation in M&A volume also indicates that larger strategic players are exercising caution. Many appear to be holding onto their cash reserves, waiting for the right mature MedTech companies to acquire and observing how the market stabilizes in 2025. This measured approach reflects a desire to ensure that acquisitions are both strategic and timed to align with broader market trends. For service providers and smaller MedTech companies, understanding these dynamics is essential for navigating the current environment and positioning themselves for success as the market begins to stabilize and grow.
Figure 5 illustrates the distribution of funding across different stages of MedTech company maturity, ranging from preclinical to commercial stage, between 2023 and 2024. In 2023, more capital was invested in preclinical stage companies than in 2024, which reflects the ongoing need for early-stage innovations to secure the resources necessary for product development. However, the data reveals a significant shift in 2024, with investment in clinical-stage companies nearly doubling, reaching $21 billion. This suggests that successful preclinical-stage companies funded in 2023 moved into the clinical development phase in 2024, securing additional funding to advance their products through validation and regulatory approval.
Figure 5. Funding distribution by MedTech company maturity.
In addition, funding for commercial-stage MedTech companies saw a notable increase of $10.5 billion in 2024, signalling a strong market for established companies that are focused on scaling, commercialization, and market penetration. This surge in funding presents a significant opportunity for commercial service providers, who should strategically position their solutions to cater to the growing demand from these companies. By aligning their offerings with the needs of commercial-stage companies, service providers can capitalize on the influx of capital being directed toward growth and market expansion.
Contract Research Organizations (CROs) should also consider targeting commercial-stage companies for post-market surveillance study opportunities. As these companies bring their products to market, regulatory requirements and the need for ongoing studies to monitor safety and efficacy will drive demand for CRO services. By focusing on this specific need, CROs can tap into a lucrative segment of the market that is expected to grow in the coming year.
Additionally, regulatory consulting services are well-positioned to benefit from the funding spikes in both clinical and commercial-stage companies. As more companies advance their products through clinical trials and seek regulatory approval, the demand for expert guidance on navigating complex regulatory frameworks will increase. Regulatory consultants should capitalize on this trend by targeting larger projects, helping companies with regulatory strategies that will ensure successful product launches and market access. Overall, the funding trends in Figure 5 indicate a healthy and growing MedTech ecosystem, with ample opportunities for service providers who align their strategies with the evolving needs of companies at various stages of development.
Figure 6. Funding distribution by (A) technology type and (B) therapeutic area.
Funding for medical devices saw a significant increase of $20 billion from 2023, underscoring the strong focus on this category within the MedTech industry. This growth highlights the continued investment in developing and advancing medical device technologies, which remain a cornerstone of the healthcare ecosystem. In contrast, funding for in vitro diagnostics (IVD) and Software as a Medical Device (SaMD) is much smaller, with IVD securing $3 billion and SaMD just $900 million. While these categories are still important, the disparity in funding suggests a heavier emphasis on physical medical devices, likely due to their broad applications and critical role in patient care.
For service providers, this funding distribution offers a clear opportunity to mitigate risk by focusing on well-funded technologies in the medical device category. By aligning their services and solutions with the needs of this sector, providers can tap into the substantial capital flowing into medical devices and position themselves as valuable partners in the development, testing, and commercialization of these technologies.
Funding by therapeutic area also shows robust growth, with significant increases across all major categories in MedTech. Notably, the largest funding boosts are attributed to high-risk therapeutic areas such as cardiovascular, neurology, oncology, urology, and gastroenterology. These areas often involve complex technologies and rigorous regulatory pathways, driving the need for specialized support from service providers. Companies operating in these fields are likely to require assistance with clinical trials, regulatory consulting, and advanced manufacturing, creating significant opportunities for service providers who can meet these needs.
One standout area of growth is women’s health technologies, which experienced its largest amount of investment in the past 20 years. This surge signals a growing recognition of the importance of addressing women’s health issues and the potential for innovation in this space. Service providers who can offer tailored support to companies developing women’s health technologies have the opportunity to enter a rapidly expanding market and contribute to the advancement of this historically underfunded area of healthcare. Collectively, these funding trends point to a dynamic MedTech landscape with diverse opportunities for service providers who strategically align their offerings with market demands.
The number of funded public MedTech companies remained virtually unchanged between 2023 and 2024. This stability suggests that public companies are generally more financially secure, often generating consistent revenue streams that reduce their reliance on external funding rounds. Unlike private companies, public MedTech firms are less likely to raise capital frequently, which makes funding a less reliable signal for service providers looking to time their outreach. Instead, providers should focus on other indicators, such as product development timelines, regulatory milestones, or commercialization efforts, to better predict when public companies may require preclinical, clinical, regulatory, or commercial services. By leveraging these alternative signals, service providers can align their efforts more effectively with the unique needs of public companies.
Figure 7. Funding distribution between public and private sectors.
In contrast, the number of funded private MedTech companies decreased by several hundred in 2024. However, this decline was accompanied by a significant increase in the average deal size, with more than double the investment going toward each funding round. This shift indicates a trend toward fewer but larger investments, suggesting that investors are focusing their resources on more established or promising private companies with stronger growth potential. For service providers targeting private MedTech firms, this means the sales process must be more strategic and precise. With fewer companies to prospect and a greater emphasis on financial stability, there is less room for error in identifying and engaging with the right opportunities.
Service providers selling to private MedTech companies should prioritize research and tailored approaches to ensure they are targeting the right businesses. Understanding each company’s funding trajectory, stage of development, and strategic priorities will be critical to successfully securing partnerships. This focused strategy can help providers navigate the competitive landscape of private MedTech companies, allowing them to capitalize on the larger deal sizes while minimizing wasted efforts on less viable prospects. Together, these trends highlight the importance of adapting sales and marketing approaches based on the unique characteristics of public and private MedTech companies.
The number of clinical trials initiated is a key indicator of growth in the medical technology pipeline and a valuable signal of opportunities for MedTech service providers. Data from 2022 to the present highlights an important trend: there are at least twice as many clinical trials being initiated by non-funded MedTech companies compared to those that have received funding. Furthermore, this gap is widening year-over-year, with an increasing number of clinical trials driven by non-funded companies, while trials from funded companies are decreasing during the same period. This shift reflects a changing dynamic in the MedTech sector, where non-funded companies are becoming more active in clinical development despite lacking external investment.
Figure 8. (A) Distribution of funded vs non-funded MedTech companies initiating clinical trials in the past 3 years. (B) MedTech funding volume in the past 3 years.
This trend is further supported by data in Figure 8B, which shows a steady decline in the percentage of funded MedTech companies since 2022, dropping from just over 10% to approximately 8%. The decreasing share of funded companies suggests that reliance on funding signals as a trigger for identifying business opportunities is becoming less effective. For MedTech service providers, this means that traditional strategies such as tracking funding announcements or relying on word of mouth to uncover prospects will be increasingly unreliable. With fewer funded companies and less public visibility into their activities, the competitive landscape for securing clinical trials and other service contracts is becoming more challenging.
To adapt to this evolving environment, service providers must refine their approach to identifying and engaging with MedTech companies. Developing stronger networks, leveraging data analytics to track clinical trial initiations, and targeting non-funded companies with promising pipelines will be critical. By shifting their focus beyond funding signals and adopting a proactive, data-driven strategy, service providers can ensure they remain competitive and capture opportunities within the growing pool of non-funded MedTech companies driving clinical development. This nuanced approach will be essential for navigating a market where the pathways to identifying and securing business opportunities are becoming increasingly complex.
The total number of FDA device recalls has risen from 2023 to 2024, reflecting an ongoing trend of increased regulatory scrutiny in the MedTech sector. As global regulations for medical technologies become more stringent, this upward trajectory in recalls is likely to continue year over year. The growing emphasis on compliance highlights the challenges that MedTech companies face in navigating complex regulatory frameworks and maintaining the quality and safety of their devices. This trend underscores the critical need for expert guidance to help companies address compliance issues proactively and avoid costly recalls.
Figure 9. FDA recalls by quarter from 2023 to 2024.
For regulatory consulting firms, this presents a significant opportunity. The rising volume of recalls signals a growing demand for services that can support MedTech companies in achieving and maintaining compliance with evolving regulatory standards. By positioning themselves as partners in quality assurance and regulatory compliance, consulting firms can play a vital role in helping companies identify potential risks, address regulatory gaps, and develop strategies to ensure adherence to global standards.
Tracking device recalls should become a key strategy for regulatory consulting firms to identify potential project opportunities. A device recall often indicates underlying challenges within a company’s regulatory or quality systems, creating an opening for consultants to offer their expertise. Firms that monitor recalls closely can proactively reach out to companies in need of compliance support, positioning themselves as trusted advisors capable of preventing future issues and safeguarding product integrity. In a landscape of increasing regulation and heightened scrutiny, consulting firms that take a proactive approach will be well-positioned to capture business opportunities and drive value for their clients.
Each year, only a limited number of PMA (Premarket Approval) and De Novo devices gain approval from the FDA, with the majority of approvals coming from 510(k) submissions. However, there was a notable decline of approximately 400 510(k) approvals in 2024 compared to 2023. This decrease aligns with the challenging financial climate of 2023 and the now widely recognized delays in clinical development timelines, which are typically 8–16 months out from the initial receipt of funding. These factors have contributed to a slowdown in the progression of MedTech innovations through the regulatory pipeline, particularly in the 510(k) category.
Figure 10. FDA device approval volume from 2023 to 2024 segmented by approval type.
Interestingly, only about 10% of 510(k) approvals require clinical trials, which has significant implications for MedTech CROs. Since the majority of 510(k) devices do not involve clinical trials, CROs must adopt a more strategic approach when targeting companies for business opportunities. Rather than casting a wide net, CROs need to focus on identifying companies with products that are more likely to require clinical trial support. This could involve closely monitoring pipeline activity, funding levels, and regulatory submissions to pinpoint companies developing complex or high-risk devices that fall within the subset of 510(k) submissions necessitating clinical trials.
For CROs, this means investing time and resources into prospecting only the most relevant MedTech companies to maximize efficiency and ROI. Understanding which devices and companies are most likely to need clinical trial services will allow CROs to tailor their outreach and offerings, ensuring they are engaging with the right opportunities. As the MedTech landscape continues to adapt to economic and regulatory pressures, CROs that take a focused and data-driven approach will be better positioned to navigate the shifting market dynamics and secure meaningful partnerships.
High-risk medical devices represent a significant opportunity for MedTech Contract Research Organizations (CROs) to deliver valuable clinical support to companies working in these critical areas. High-risk devices often face more stringent regulatory requirements and require robust clinical evidence to secure approval and market entry. This creates an ongoing demand for specialized services that CROs are uniquely positioned to provide, such as clinical trial design, management, and data analysis. The therapeutic areas most commonly associated with high-risk devices include cardiovascular, neurology, oncology, orthopedic, urology, and women’s health. These fields often involve technologies with complex mechanisms of action and higher stakes for patient outcomes, underscoring the need for comprehensive clinical trial support.
Figure 11. Clinical trial initiation volume by therapeutic area between 2023 and 2024.
Despite the promising opportunities within these therapeutic areas, 2024 saw a decline in the total number of clinical trials initiated compared to 2023. This decrease highlights the lingering effects of economic and funding challenges that have slowed clinical development timelines across the MedTech industry. For CROs, this means a more competitive landscape, as fewer trials are entering the pipeline. However, the continued presence of high-risk devices in pivotal therapeutic areas signals that there is still substantial potential for growth. By focusing their efforts on companies operating in these fields and tailoring their services to meet the unique demands of high-risk clinical trials, CROs can position themselves as indispensable partners for MedTech companies navigating this challenging but rewarding market segment.
The MedTech landscape in 2024 presents both tremendous opportunities and evolving challenges for service providers. With funding for MedTech companies increasing across various stages of development, there is a clear surge in clinical innovation, regulatory compliance needs, and a heightened demand for specialized support. From early-stage innovators to established commercial players, the market is primed for service providers who can align their offerings with emerging trends in clinical trials, FDA approvals, M&A activity, and therapeutic advancements.
For MedTech service providers, this means embracing a proactive, data-driven approach to business development, moving beyond traditional funding signals and tailoring services to the unique needs of companies at each stage of growth. Whether it's capitalizing on the influx of funding for clinical-stage companies, supporting regulatory compliance amid rising FDA recalls, or focusing on high-risk therapeutic areas such as oncology, neurology, and cardiovascular devices, strategic insights into market dynamics will be crucial to staying competitive.
Zapyrus stands ready to help MedTech service providers navigate this evolving landscape. With its advanced data analytics platform, Zapyrus enables service providers to identify high-potential companies, track clinical trial trends, monitor funding activity, and gain real-time insights into the latest industry developments. By leveraging Zapyrus’ solutions, you can pinpoint opportunities, optimize your outreach strategy, and engage the right prospects at the right time, ensuring that you remain at the forefront of the MedTech market.
Take the next step in boosting your business growth in 2025. Schedule a call with Zapyrus today. Let us show you how our platform can help you refine your strategy, accelerate your sales pipeline, and position your services for success in this dynamic industry.
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