How Medical Device IPOs Could Spark a Health Tech Renaissance: Insights from PYMNTS.com

Could 2025 be the year medical device companies finally bounce back in the IPO game? Recent reports suggest that we might see a shift.

Two cardiac device manufacturers, Kestra Medical Technologies and Heartflow, are gearing up for initial public offerings. They’re seeking advisers to help them navigate this process, and these IPOs could happen as soon as the first half of the year.

For a long time, the IPO landscape for medical tech has been quiet. High interest rates and disappointing performances from other medical companies that went public during the pandemic made investors hesitant. In fact, only four medical device companies went public in the U.S. over the past three years. But things might be changing.

Heartflow decided to postpone a planned SPAC listing in 2022, which could have valued it at $2.8 billion. This company specializes in devices for diagnosing coronary artery disease. Meanwhile, Kestra focuses on a wearable device that monitors heart rhythms and can defibrillate when needed. Last July, Kestra raised $196 million in funding, signaling strong investor interest.

Many are hopeful that 2025 could bring a resurgence in the IPO market. Investment bankers are starting to prepare for an upswing, with a lineup of promising companies poised to go public. Alongside Heartflow and Kestra, other hopefuls include medical supply company Medline, liquefied natural gas producer Venture Global, and cybersecurity firm Sailpoint.

The renewed energy in capital markets reflects increasing economic confidence. This momentum could help private equity-backed companies that have faced challenges in going public recently. With high interest rates and stock market volatility impacting deal-making, many firms are taking a proactive approach.

“Many of the companies owned by private equity firms have become sizable,” noted Arnaud Blanchard from Morgan Stanley. He emphasized that sponsors recognize the need for a strategy that accounts for a longer exit timeline, which is why they are kicking off plans now.