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| The Daily Pitch |
| PE, VC and M&A |
| Your edge on global private capital markets |
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| Good morning. In today’s Daily Pitch, we look at how startup buyers are filling the VC deal gap and how AI agents for healthcare services could get to $155 billion in annual revenue. Also: The year's biggest PE-backed IPOs. |
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| With VC dealmaking down, startup buyers are filling the gap |
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By Leah Hodgson, Senior VC Reporter
In a market where VC funding is increasingly scarce for everyone except the top performers, more startups are turning to their peers to survive and scale.
According to PitchBook data, VC M&A dealmaking where startups themselves were the buyers surged this year, reaching 686 deals worth a record $42.5 billion. This represents increases of 5% and 34% respectively from 2024. |
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Consolidation is becoming an increasingly appealing option for startups struggling to secure their next raise, particularly as the liquidity market remains constrained. Combining two companies in the same market can often produce a stronger entity with a broader customer base and a deeper product, both of which offer a more compelling narrative for investors.
VCs, who are struggling to secure commitments for their next funds, are incentivized to push portfolio companies to pursue acquisitions of their peers.
The rapidly increasing competition in the AI space has also driven more acqui-hires, where a startup is bought primarily to capture its employees rather than its products or customers. As VCs pile more cash into AI, larger startups have a growing war chest to snap up competitors or adjacent players.
OpenAI‘s $6.5 billion acquisition of Jony Ive’s AI hardware startup io Products was the largest deal to close this year. The ChatGPT maker also bought product testing startup Statsig for $1.1 billion.
Other more established companies are acquiring startups to advance their technology, such as digital media business Napster‘s $500 million acquisition of agentic AI company Touchcast. |
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• Market turbulence, tariffs and a late-year government shutdown slowed PE-backed IPOs in 2025, but exit momentum revived as the year went on. Top IPOs: See the list
• European private credit outlook for 2026: Sector shifts bring AI and defense into focus as the private credit market expands its toolkit and extends sector reach. Full coverage
• VC funding for the defense-tech industry has reached nearly $40 billion this year—with capital consolidating around AI and skyrocketing in hardware segments like hypersonic munitions. Read the report |
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| Healthcare services AI agents emerge as a $155B market |
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By Brian Wright, Lead Healthcare Research Analyst
AI agents for healthcare services could potentially generate $155 billion in annual revenue and unlock more than $300 billion in net administrative savings each year by 2030, according to new PitchBook research.
AI agents—software that can autonomously execute multistep tasks—are poised to become the next major platform layer in healthcare tools, expanding far beyond ambient note-taking for doctors into end-to-end administrative and workflow automation.
AI agents are increasingly capable of absorbing the administrative burden that has been ballooning across US healthcare for decades. Healthcare administration employment rose by more than 3,000% between 1970 and 2010, vastly outpacing growth in physician employment. Agentic AI offers a plausible path to reversing this trend by automating front-office, back-office and care-delivery workflows at scale.
US healthcare administrative spending reached roughly $950 billion in 2019, according to McKinsey, and could exceed $1.5 trillion by 2030 under conservative growth assumptions. If AI agents capture just 10% of that spending, the resulting addressable market reaches $155 billion annually. More importantly, if AI reduces total administrative costs by 30%, net systemwide savings could exceed $300 billion per year—an outcome with material implications for provider margins, payer cost trends and labor dynamics. |
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Adoption is already accelerating. Data compiled by Menlo Ventures shows that 27% of health systems are paying for AI tools from vendors, nearly double the adoption rate of payers. Venture funding reflects this momentum: Healthcare services AI agent companies raised $3.4 billion through the first nine months of 2025, with ambient AI scribes accounting for nearly half of the total deal value.
But a consolidation wave looms. Top providers of ambient scribe tools are rapidly expanding into revenue cycle management, prior authorization and clinical workflow support, marketing themselves as a system-of-record that could disrupt the current healthtech stack. These market-leading companies will likely grow both organically and through M&A.
For investors and strategics, the message is clear: Healthcare services AI agents are shifting from point solutions to platforms, with scale economics, consolidation dynamics and cost-containment tailwinds that could define the next decade of healthcare IT. |
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Smart reads that caught our eye.
• Inflation has been top-of-mind for years. That could change soon, as jobs replace prices as the focus of anxiety. [The Wall Street Journal]
• The fallout from a 10-hour data-center outage is testing the ambitions of KKR and GIP, whose plans run through the center's operator CyrusOne. [Bloomberg]
• Why do AI chatbots use 'I'? They’ve been designed to chat like people and respond in a humanlike way. Is that a good idea? [The New York Times] |
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| Since yesterday, the PitchBook Platform added: |
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21
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124
People
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68
Companies
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2
Funds
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