When global electronics giants divest once-core businesses to build a presence in medical technology, it’s a clear sign that this is a highly-attractive market.
The medtech sector includes a range of sophisticated devices, from dialysis and cardiovascular equipment, through to surgical instruments and imaging technology. Across this range of products, several features stand out:
- Equipment purchasers are high-spending and focused on quality. Around the world, spending on healthcare is rising as a proportion of GDP. In Europe and the US particularly, public and private healthcare purchasers have big budgets and demanding consumers.
- US market domination will be challenged. Several major European corporates are refocusing their business to create substantial rivals for the American giants. Proximity to market is a key success factor, so the threat from low-cost production in Asia is currently limited.
- Successful innovation reaps huge rewards. Industry goals include the miniaturisation of equipment, the enabling of remote operations and the upgrade of materials used for implants. Companies that achieve these goals successfully will see rapid growth in sales and profits.
Although the market is dominated by major players, there are many opportunities for 3i to support businesses that play disruptive and niche roles. We support start-up and early-stage enterprises that are changing the rules of the game, and established companies that have a distinct product or regional niche which is ripe for expansion. When we partner businesses, we use our strong relationships with major multinationals to support their evolution. In return, the big players find fresh sources of innovation and attractive opportunities for new partnerships.
