Healthcare Growth Partners is excited to release its July 2026 Health IT Market Review, offering a detailed analysis of the trends and dynamics shaping the industry. From M&A valuations and funding trends to regulatory developments, this report explores the major forces poised to shape the Health IT landscape going forward.
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Key Highlights:
- Private equity exit backlog in Health IT persists despite improved exit activity: Health IT exits reached record levels in 2024 and 2025, yet a substantial backlog of aging sponsor-backed assets continues to delay capital returns to limited partners. Contrary to common perception, this overhang reflects years of investment accumulation and a slower realization cycle rather than a surge in COVID-era buyouts, underscoring the need for an acceleration in exits and DPI.
- Health IT M&A and valuations recover after a volatile start to 2026: Health IT M&A rebounded in Q2 from 101 to 121 announced transactions after a slower start to the year, with buyers remaining active but increasingly selective as underwriting standards tightened and greater emphasis shifted toward profitability, recurring revenue quality, AI defensibility, and strategic differentiation. Valuations followed a similar trajectory, declining from 5.3x to 3.7x before recovering to 4.7x revenue.
- Health IT’s structural moats have tempered the SaaSpocalypse: While Enterprise SaaS revenue multiples across vertical software declined from approximately 5.5x to 3.1x before recovering to roughly 4.0x revenue by the end of Q2, Health IT’s durable competitive advantages helped support valuations, with AI increasingly creating a growth accelerant for established platforms.
- Health IT investment activity strengthened as capital concentrated behind market leaders: Investment activity continued at a healthy pace during the first half of 2026 despite a softer second quarter, while the 20 largest financings accounted for approximately 56% of invested capital. Capital flowed to both AI-native innovators and established Health IT platforms experiencing a second growth act through AI.
