Platform business models: Private equity opportunities in the life sciences and health care sector | Deloitte Global

Platform businesses are rewiring the traditional value chain. In nearly every industry, well-thought-out platform businesses typically beat traditional businesses because of superior unit economics and network effects. With an estimated US$1 trillion opportunity for platform businesses in health care, private equity funds should look to transition select portfolio companies to platform businesses, and command higher valuations.

This report identifies plays for healthtech and medtech portfolio companies to transition to platform businesses and offers examples of how players are doing this in the market today. To begin transformation to a platform business, companies should ask the following questions:

• What part of my business or capabilities can be delegated to the ecosystem?
• Which partners should I consider and how do I incentivize them on my platform?
• What monetization models should be considered for the new business?
• How do I quickly test the viability of the business model before scaling?
• How do I organize my operating model to sustain a platform business?

Through the adoption of a platform business model, private equity-backed healthtech and medtech companies and the private equity funds themselves, can effectively navigate dynamic industry shifts and evolving provider and patient needs.