The world of digital health may enter a new phase this year in which execution is as important as innovation, according to leaders at venture capital and private equity firm Breyer Capital.
They believe the following three industry trends will influence market dynamics in 2026.
Biotech constraints are shifting from biology to logistics
Bret Bostwick, who joined Breyer as a risk consultant last month, said this year may mark a turning point in health care innovation, where the biggest challenges are no longer scientific but practical.
“In the past, the reason we got stuck in certain therapeutic areas was because the biology wasn't advanced enough to allow us to take the next step. We're getting better at understanding the biology but are limited by logistical barriers,” he commented.
With the science largely in place, the real opportunity lies in technologies that make treatments easier to deliver, cheaper to produce and easier to scale, Bostwick said.
He noted that a key opportunity is the shift from ex vivo to in vivo approaches in cell engineering. This means that instead of removing a patient's cells, modifying them in the lab for weeks, and then reinjecting them, doctors can deliver the therapy directly into the body, reprogramming the cells on the spot.
Bottom-up adoption
Morgan Cheatham, partner and head of healthcare and life sciences at Breyer, noted that healthcare startups' go-to-market strategies are shifting from traditional enterprise sales to direct-to-clinician and direct-to-consumer models.
Rather than engaging in slow and complex procurement processes within health systems, companies are increasingly reaching users through product-led experiences that are first adopted by clinicians and then rolled out across institutions.
“I'll use OpenEvidence as an example, but there are other examples – we're starting to see a bottom-up movement where companies are bringing delightful products to market that meet the needs of healthcare and life sciences users in more accessible formats,” Cheatham said.
The rise of AI is also helping startups build and launch products faster and iterate directly with clinicians and scientists, he added.
While this approach can accelerate early adoption, startups will eventually need to reintegrate into enterprise systems such as electronic medical records and claims platforms.
Integration is coming
The proliferation of artificial intelligence startups in healthcare has created a crowded market, and Cheatham expects this to be a big year for mergers and acquisitions, especially on the software side.
Many companies will have to face a strategic question: Can you become a platform or category leader, or are you stuck in a niche that will be acquired or marginalized?
“Get out or get out,” Cheatham declared.
Cheatham said that as healthcare organizations are re-evaluating their technology stacks and AI capabilities, they are increasingly moving towards using fewer, more integrated platforms rather than fragmented tools. He believes this shift will accelerate deals and reveal which companies emerge as the real winners.
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