For private equity investors, Asia Pacific medical technology is a relatively shallow pool. The region is an importer of innovation rather than its source; addressable targets tend to be small, family-owned businesses rather than original equipment manufacturers (OEMs) of scale; and differing regulatory environments and levels of maturity are an obstacle to cross-border expansions.

Yet Asia Pacific is playing its part in medtech’s post-pandemic renaissance. Global deal volume nearly doubled in 2025, while the number of transactions increased 20% year-on-year, according to Bain & Company. North America and Europe remain the major actors, but Vikram Kapur, the firm’s global head of healthcare and life sciences, sees significant growth in APAC.

“Medtech is emerging as a more viable investment sector in Asia today than it was five years ago, because the stock of assets has grown, and investor familiarity has increased. Also, the markets of focus – which used to be Japan and China – have expanded to include South Korea and India,” he said.

“Five years ago, investors rarely talked about medtech in Korea or India, but these ecosystems have developed even as they sat on the sidelines. Now, as the market rebalances, investors have broadened their coverage to include these markets.”

Part of this is the pivot from China to developed Asia plus India happening in almost every sector. Private equity investors are highlighting specific growth opportunities in new markets, but they have been driven to look for them by changing geographical risk appetite.

It is certainly true that China was the dominant force in medtech through 2021 only to be supplanted by Japan and Korea. Large-cap buyouts have been a key contributing factor, from the USD 2.7bn carve-out of Evident Corporation to take-privates of Osstem Implant and Hogy Medical – USD 2.4bn and USD 878m, respectively – to the USD 1.5bn sponsor-to-sponsor sale of Hugel.

These deals might be intermittent, but Korea can point to a 25% annual average share of regional medtech deal volume since 2022, up from 4% in the preceding four years, according to AVCJ Research. While Japan and India have been more volatile, the general upward trend is unmistakable.

At the same time, medtech has its own nuances. The drop-off in China coincided with policy-driven shifts in volume-base procurement (VBP) that left domestically oriented companies with crushed margins, observed Stephen Sunderland, a partner at LEK Consulting. A difficult exit environment didn’t help.

China saw a resurgence in 2025, which Dalin Cao, a partner at GL Capital, links to an easing of the VBP impact on contract renewals. “Orthopaedic companies, after two to three years of sideways adjustment, have shown clear improvement in both financial and market performance from 2025 onward. This should spread to other device categories as they move through similar cycles,” he said.

However, the dangers of overdependency on domestic demand hit home, prompting Chinese medtech players to develop export channels. It fits neatly into a region-wide narrative of targeting – or building – companies with global reach, which translates into business model resilience and more options on exit.

Global agendas

Japan is a target-rich environment of conglomerates with international footprints and assorted pressures encouraging non-core divestments. Olympus sold off Evident, its scientific solutions unit, to enable a tighter focus on certain areas of medical technology. Bain Capital, the buyer, saw its ability to address multi-subsidiary multi-jurisdictional businesses as a competitive edge in the bidding process.

“There are product lines and operations all over the world, including a couple of companies in the US and Canada that were acquired,” Yuji Sugimoto, a partner at the private equity firm told AVCJ in 2024.

Hogy Medical, meanwhile, became available on the back of activist investor pressure that is driving corporate Japan consider asset sales and take-private proposals. In this instance, Dalton Investments secured board representation and actively agitated for a privatisation. Carlyle obliged, launching a tender offer that closed successfully earlier this month.

The company, which manufactures surgical kits and sterilisation pouches, has production facilities in Indonesia and a stated ambition to increase overseas distribution. Southeast Asia is a key target, specifically Thailand and Singapore for their ageing populations, and the Philippines and Malaysia because of rising demand for infection control.

Globalisation is also a prevalent theme in Japan for Lyfe Capital, a private equity firm with China origins that now pursues a broader geographic mandate with an emphasis on international supply chains. It is interested in working with companies – via carve-outs from corporates or small and medium-sized enterprises (SME) partnership deals – that have strong products but limited cross-border reach.

“Japan has strong precision engineering. In medical devices, endoscopy – led by Olympus and Pentax – performs very well globally. The same goes for interventional devices like cardiovascular and neurovascular guidewires,” said Jack Chen, a partner at Lyfe Capital.

Korea has emerged as a focal point by virtue of its world-leading medical aesthetics. Lyfe has participated in three deals for aesthetic device makers: supporting privatisations of Jeisys Medical and Viol – led by ArchiMed and VIG Partners, respectively – and buying 70% of Koru Pharma for USD 75m.

The model for taking Korean aesthetics global is based on the success of Hugel, a Botox supplier that Bain owned for three years through 2021 before selling to a CBC-led consortium. One-third of Hugel’s revenue came from domestic sources in 2024, down from two-thirds five years earlier. Asia Pacific ex-Korea led the way in 2024 with a 39% share.

HighLight Capital (HLC), another Chinese GP looking to build an Asian footprint, went as far as to back a team spinning out from Hugel. During due diligence on CellArk, which supplies collagen stimulators and fillers, it made introductions to Chinese key opinion leaders who could advise on expansion strategies.

“Korean companies have proven themselves domestically, they compete well, and they sit between Western and Chinese players. They’ve been doing well in North America, parts of Europe, and even China,” said Bain & Co’s Kapur. “That’s why you see a range of funds doing deals in Korea to back international growth.”

Chulmin Lee, a managing partner at VIG, added that medtech appeals to private equity in Korea because the broader healthcare sector offers few entry points. Hospitals, for example, are typically non-profit and cannot be rolled up into chains, while control deals are scarce in pharma, he told AVCJ following the close of the Viol investment last year.

VIG regards Viol as an established international brand that could do more to cultivate domestic demand. The company, a supplier of energy-based devices (EBDs) for skincare and aesthetic treatment, generates 90% of its revenue overseas, with a scattered presence across developed and emerging markets.

India vs China? 

India, in contrast, has a medtech ecosystem being built from the ground up on the back of rising domestic insurance penetration, which is fuelling hospital growth and ultimately demand for devices.

On the supply side, companies have evolved from low-tech consumables to implants and artificial intelligence (AI)-native platforms. Recent progress is enough to convince Rahul Agarwal, a partner at specialist healthcare investor HealthQuad, that India’s expansion in generic pharmaceuticals and formulations in the past two decades can be replicated in medtech.

Investment activity is increasing at every stage, helped in part by a receptive IPO market. Implants and consumables dominate the buyout end, exemplified by KKR’s acquisition of Healthium Medtech from Apax Partners and Warburg Pincus buying a majority stake in Appasamy Associates. There are typically one or two control deals – in the USD 500m-USD 1bn range – each year, according to Agarwal.

In the mid-market space, there might be half a dozen investments, mostly sub-USD 60m, focusing on devices and technology-enabled platforms. AI-native start-ups feature at the venture stage. For example, HealthQuad first backed medical imaging specialist Qure.AI via a USD 40m round in 2022. The company has gone on to accumulate USD 125m in funding and is aiming for an IPO within two years.

Novo Holdings, a global life sciences investor, co-led Qure.AI’s 2022 round with HealthQuad. Its later stage medtech debut came last year with a commitment to Schott Poonawalla, which supplies packaging for injectable pharmaceuticals, alongside TPG Growth.

“India is moving quickly up the value chain, reflected in our investments in platforms such as Schott Poonawalla and Qure.AI, which exemplify the country’s growing capabilities across medtech infrastructure and AI‑driven healthcare,” said Amit Kakar, a managing partner and head of Asia at Novo.

Companies are also emphasising exports early on, establishing distribution footprints in emerging and developed economies. Qure.AI already generates 80% of its revenue from the US and Europe. Two InvAscent portfolio companies, coronary stent supplier Relisys Medical Devices and Biorad Medisys, which makes orthopaedic hip and knee replacement implants, are targeting the same markets.

“India is still behind China when it comes to linear accelerators to treat cancer, MRI machines to diagnose, or PET-CT machines,” said Hari Buggana, founder and chairman of InvAscent. “But when it comes to implantable devices – like joints and stents – Indian quality is as good as European or American quality.”

Agarwal added that China remains a deeply entrenched powerhouse in electronic devices and sensors, with India and Southeast Asia-based companies still sourcing from their neighbour in such areas.

“Wherever we go – India, Southeast Asia, the GCC [Gulf Cooperation Council region], or Africa – Chinese players are very relevant,” he said. “Multinationals will always focus on the top tier. Below that, Chinese, Indian, and some Southeast Asian companies compete.

Chinese pressure is unlikely to let up. Overseas expansion has shifted from being a “bonus” to a “requirement” in response to revised domestic expectations post-VBP, according to GL Capital’s Cao.

The private equity firm acquired wound dressings business Foryou Medical Devices in 2023 and is now helping the company set up production and distribution in Southeast Asia. This may ultimately serve as a launching pad for entry into developed markets.

Getting connected

Upstream supply chain players like Foryou are generally easier to map out in Asia because of the region’s deep manufacturing ecosystem that appeals to multinational brands. Lyfe’s Chen observed that the opportunity set is expanding against a backdrop of inflation in the US and Europe and supply chain disruption. Asia offers speed at lower cost, while quality is reaching global levels.

Risk management is another pressing concern as brands look to diversify sourcing channels. In 2019, when The Longreach group acquired Quasar Medical, a manufacturer of cardiovascular catheters with a global customer base, Japan expansion was part of the plan. Ultimately, one of the most significant value creation initiatives was adding a factory in Thailand to diversify a China-centric footprint.

Lyfe is taking a similar approach with Singapore-based Fong’s Engineering & Manufacturing, which it bought in 2023. It is building a multi‑site platform, having completed the bolt-on acquisition of China’s Jiangsu Kersen Medical Instrument and rolled out greenfield facilities in Malaysia.

Both Lyfe and GL Capital explain their shift towards control deals not only in the context of being able to dictate the timing and mode of exit, but also in response to a maturing medtech ecosystem. Growth-stage investments are giving way to cross-border aggregation projects whereby smaller operators are plugged into better-connected and better-resourced platforms.

“We see smaller players with up to USD 20m in revenue with good capabilities, but they only serve domestic customers. They lack international quality and the kind of customer relationships built on years of trust,” said Chen. “By integrating them into our platform, which already has that trust and quality, we can grow a bigger business.”

Opportunities are also proliferating in the mid to large-cap space – chiefly companies with valuations of USD 150m-USD 200m and annual profit of USD 10m or more – where operational bottlenecks and consolidation pressure are contributing factors. Succession planning may also come into it.

Private equity investors prioritise innovation capabilities as well as capacity for global expansion when screening targets. While biotech innovation is typically driven by start-ups, established mid to large-sized companies are the main actors in medtech, according to GL Capital’s Cao.

Moreover, innovation leverages China’s engineering dividends. The Lyfe portfolio features advanced surgical robotics specialists Edge Medical, Noah Medical, and Shenqi Medical Technology, each of which has incorporated AI. Edge achieved a USD 1.5bn valuation after several private rounds before completing a Hong Kong IPO in January at a market capitalisation of HKD 16.8bn (USD 2.2bn).

The immediate impact of AI could be profound given companies are bringing it to market in different ways and at different speeds. However, LEK’s Sunderland questions the long-term implications for the commoditisation and stickiness of medtech. The industry already benefits from a high degree of customer stickiness linked to the cost of switching suppliers.

“As you look three, five years out over a private equity ownership cycle, how do you evaluate whether AI has added value, or whether it’s just table stakes, or even destroying value? I don’t think there’s a consensus yet. It’s a complicated problem, and it’s probably going to be different depending on the category,” Sunderland said.

Early-stage issues

Early-stage investors treat AI as one of multiple potential disruptions in medtech. HLC has significantly reduced its exposure to the industry. Steven Wang, the firm’s founder and CEO, cited VBP and likely slower growth as devices are displaced by therapeutic innovation. For example, advances in precision medicine and sensor-based continuous diagnostics may reduce the need for invasive devices.

As a generalist investor, venture capital firm Ince Capital looks at medtech in terms of hardware plays like robotics and consumer devices, and software, which encompasses AI-enabled drug discovery tools, medical large language models (LLMs), and AI‑native platforms. Stella Zhou, a founding partner at Ince, noted that whether the focus is hardware or software, niche specialists tend to be favoured.

Recent activity includes re-upping in a USD 67m Series D for Ronovo Surgical, which develops minimally invasive surgical robotics systems. Ince first backed the company in 2024, drawn in by nascent domestic demand, scope for global expansion – Ronovo’s flagship product received regulatory approval in China last year and has made submissions in Europe and Latin America – and a truly differentiated offering.

“Not every hospital has the same needs. Ronovo had a great idea: separating the arm design, so the arms are modular. This means that hospitals don’t have to purchase a full six arm system; they can buy only the arms they need. That makes it much more budget friendly,” Zhou said.

“Moreover, because it’s a separate arm design, the angles can be more comprehensive, allowing for greater flexibility and potentially making operations smoother for doctors and nurses.”