Why classical buy-and-build does not work in healthcare tech
The buy-and-build playbook from other sectors — software, fintech, manufacturing — relies on three levers: cost synergies through consolidation, sales power through cross-selling, and multiple arbitrage by combining small companies into a larger asset. Three levers that in healthcare tech either fail to deliver or directly destroy value.
Cost synergies through consolidation typically mean discontinuing one product line in favor of another and 'migrating' the associated customer base. In healthcare, migration means changing workflows, retraining professionals, and risking data-continuity loss. It is almost always a net loss — not only for the customer but also for the operational value of the acquired company.
Cross-selling only works if the acquired customers genuinely need the products of the other portfolio companies. In healthcare tech, software decisions are made on a five-to-ten-year horizon; they are tied to implementation projects, training, and the entire governance structure of a healthcare organization. Simply pushing a planning solution onto a customer of an ECD without real product-fit will fail.
1. Culture for integration — not consolidation
Classical buy-and-build is driven by cost synergies and consolidation. In healthcare tech, that leads to product deterioration and customer attrition. We acquire to integrate into an ecosystem — not to cut. That may sound subtle, but it represents a fundamental difference in mindset.
Integration means: the acquired product retains its character, its customer experience, and its product development roadmap, and becomes part of a shared technical infrastructure. Authentication is shared, FHIR connections are shared, compliance frameworks are shared — the product itself remains the domain of the founders' team.
Consolidation means: discontinuing one product and forcing customers onto another. That works in software where users are reasonably interchangeable. It does not work in healthcare software, where every implementation is a small project in its own right and where familiarity has been built up over years. Those who consolidate lose customers — and with them precisely the cash flows that the buy-and-build was supposed to generate.
2. Founders stay on
Healthcare tech products are strongly tied to the founders who built them. Founders understand the domain-specific nuances, the relationship with the first customers, and the obvious pitfalls that have already been navigated elsewhere. When founders leave after the exit, the tacit knowledge that kept the product viable often leaves with them.
For this reason, we use rollover structures in which founders retain a substantial stake in the portfolio company, with clear agreements on operational autonomy and strategic collaboration. A board seat is not an honorary position; it is a working role in which the founder helps determine how the company integrates into the ecosystem.
Operational autonomy means concretely: founders run their own organization, define their own roadmap, and choose their own leadership team. What they receive from PCD CareHub is what they typically lack: capital, financial discipline, legal structure, shared compliance infrastructure, and access to a broader ecosystem of partners and customers.
This setup is not merely a retention strategy; it is a value creation strategy. A motivated founder within a well-supported portfolio company continues to build for three to five years — precisely the period in which the ecosystem realizes its true multiplier effect. Buying out founders immediately means acquiring an asset; keeping them on means acquiring a product organization.
3. Compliance as a platform, not a cost center
Having every individual portfolio company struggle through NEN 7510 or EHDS on its own is simply counterproductive. Shared compliance infrastructure is arguably the most powerful synergy we have. It is also the least visible — but none the less valuable for that.
A NEN 7510 process costs a mid-sized healthcare tech company between six and eighteen months, with significant direct costs in the form of consultants, external audits, and internal development capacity. Tripling that effort for three portfolio companies is wasted effort — and wasted diversity, since every company builds its own version of something that is essentially the same.
Our approach: one shared compliance framework with audit-ready logging, EU data residency, encryption by default, key management, and pseudonymization — rolled out locally within the portfolio company without requiring them to reinvent the architecture. GDPR, NEN 7510, ISO 27001, and the forthcoming EHDS thereby become an implementation project of weeks rather than a transformation project of months.
Which healthcare tech companies are a fit — and which are not
Not every company belongs in a buy-and-build portfolio. We look for three characteristics: product-fit with the ecosystem (does it naturally interact with other portfolio companies or existing customers?), a founders team that wants to remain after the transaction, and a data model that can be aligned with FHIR without rendering the product unrecognizable.
Companies we do not bring on board: healthcare tech operating exclusively in a single hyper-local niche with no relevance to the broader ecosystem; products built on closed data architectures where interoperability is fundamentally incompatible; and organizations where the founders have already exited and the product is in maintenance mode. In those cases, the foundation for value creation through integration is absent.
It may seem obvious, but applying stricter criteria on the selection side is perhaps the most important lesson from years of platform strategy: five portfolio companies that genuinely belong together are preferable to fifteen that have been assembled. The economic value of the ecosystem is a function of fit — not of scale.
What this means for healthcare organizations and investors
For healthcare organizations: a buy-and-build portfolio that pursues consolidation is a warning sign. It often means that within two years a product you rely on will be wound down, or that your original point of contact will no longer be able to help you. An ecosystem approach means your product relationship remains intact and that the software you use becomes increasingly interoperable with the other systems you rely on.
For investors: the pure financial-engineering buy-and-build model does not scale in healthcare tech. Multiple arbitrage works on paper but is eroded in practice by product deterioration and founder attrition. The ecosystem approach requires more patience and greater operational expertise, but delivers more sustainable value — because you are investing in a functioning system rather than a share package.
For founders: a transaction with an ecosystem partner is a different conversation than with a classical private equity firm. The question is not only what the valuation and the earnout are, but what the shared infrastructure means for your product roadmap, your compliance position, and your access to new customers through the other portfolio companies. That second conversation is often where the real value is created.
