Medtech founders in 2025 are operating in a distinctive environment. Over the past 15 years, large Medtech companies have grown more conservative in their M&A strategies—requiring startups to hit deeper clinical and regulatory milestones before committing to strategic investments or acquisitions. This shift has pushed venture capital firms to adopt a similar milestone mindset: scalable, de-risked, clear path to market – further restricting the flow of capital into early-stage innovation.
So, while capital has not disappeared, access to that capital has become meaningfully harder for healthcare startups – especially early-stage device companies.
According to J.P. Morgan’s Q3 2025 Medtech Venture Report, investors deployed $9.5 billion across 259 Medtech venture rounds in 2025 YTD. Of that amount, only $1.6 billion went to seed and series A startups, while $7.9 billion flowed to series B and later-stage companies. This shift illustrates the impact of milestone-driven funding.
Licensing activity reflects the same paradigm. Through Q3 2025, Medtech companies announced more than $10.1 billion in licensing deal value—but only roughly 4% of that amount was paid up front. The vast majority of deal value is contingent on regulatory approval, clinical outcomes, or commercial performance.
To unlock early capital or partners, even experienced founders with validated prototypes are forced to identify infrastructure, clinical access, regulatory expertise, and credibility at a very early stage.
AI is reshaping healthcare at an unprecedented pace. But no amount of algorithmic intelligence can replace the need for reliable, regulated hardware. From biosensors and surgical robotics to connected diagnostics, the next wave of impact will come from devices that merge hardware, data, and intelligence—and can be safely built, tested, approved, and deployed at scale.
As the regulatory and reimbursement landscape evolves, the physical side of Medtech is becoming more complex, not less. AI-enabled devices must now prove real-world performance, cybersecurity integrity, and clinical utility. This further widens the gap between promising concepts and market-ready products—where hardware-first startups need to reach milestones and prove credibility in a new environment.
In this environment, early-stage startups need to be more intentional about their path to early milestones and what resources will get them there. Many turn to incubators and accelerators to connect dots and get important introductions, but the distinction between incubators and accelerators can be blurred. Here is a basic definition of each:
Incubators typically provide long-term workspace, equipment, mentorship, and community. They support founders through early experimentation, prototyping, or company formation. Startups might choose an incubator at the earliest stages when going from proof of concept to prototype or when they need access to resources but aren’t ready to give up equity.
Accelerators are short-term, cohort-based programs designed to help startups scale faster—often through investment, structured curriculum, and investor introductions. Startups might select an accelerator when they’re gearing up to hit a specific milestone and have enough early success to attract investment.
mHUB has the privilege and differentiation of providing both, and This integration is what distinguishes mHUB from traditional accelerators or co-working spaces. Startups that enter mHUB’s Medtech Accelerator don’t exit the ecosystem at Demo Day—they remain active within the broader community, continuing to access labs, talent, and partners. Meanwhile, the accelerator itself draws investors and strategic partners into the fold, benefiting the entire incubator. This creates a high-functioning feedback loop where capital, expertise, and opportunity compound.
mHUB exists to help MedTech startups build devices faster, de-risk them earlier, and connect them to the partners who will commercialize them. It brings together the functions of an incubator, accelerator, and venture platform inside a physical innovation ecosystem. Its differentiation can be understood across three core pillars:
While mHUB provides startups with something few offer, a physical, equipment-rich environment where devices can be designed, fabricated, and iterated, this unique environment has attracted diverse stakeholders interested in U.S. competitiveness, innovation, and manufacturing. They understand that complex problems take complex tools and collaboration. When startups join an mHUB accelerator program, they’re joining an entire ecosystem. Some standards of the mHUB incubator, include:
Over $6M in prototyping and testing infrastructure: including machining, plastics, additive manufacturing, electronics labs, sensor calibration, biomechanics testing, and pilot-scale assembly tools.
1,200+ members and 300+ resident startups working onsite with over 200 average daily users — not just those participating in programs and at every stage of the product development journey.
Located in Chicago, the broader Midwest brings together three assets that are often separated in coastal hubs: advanced manufacturing, academic medicine, and logistics.
Startups that scale out of the space don’t “graduate of or disappear.” They join the mHUB alumni network with ongoing opportunities for engagement
To date, mHUB has made 27 Medtech investments spanning diagnostics, surgical robotics, digital therapeutics, and connected care devices — collectively raising more than $50 million in follow-on capital. In 2025, mHUB launched its second venture fund — a $20 million vehicle designed to expand investment capacity across hardtech sectors, including Medtech, energy, and advanced manufacturing. Unlike other accelerator programs, mHUB deploys capital directly into startups and enables corporate and investor participation through flexible funding structures.
The six-month Medtech Accelerator invests in equity capital, provides structured mentorship, and connects startups with clinicians, manufacturing experts, and regulatory advisors.
The program is operator-led with an expert mentor bench, connecting startups to MedTech founders, engineers, clinicians, and regulatory specialists who have built and commercialized medical devices.
Companies then receive 18 additional months of lab access and direct support, enabling them to continue building verification data, preparing FDA submissions, refining manufacturability, and extracting additional value as part of the general ecosystem.
mHUB enables co-investment from corporate partners, family offices, and VC firms at defined milestones — such as successful pre-submissions, prototype validation, or first-in-human results.
This aligns with current market expectations for milestone-based investment and shared risk between startups and strategic partners.
mHUB is intentional about building bridges between startups and strategic partners, not as a brand exorcise but for practical commercialization. This is witnessed in the mHUB Accelerator where partners co-create the challenge statements and participate in the selection process of each cohort. Partners come to the table seeking real engagement that drives their own innovation goals.
Partnerships with Baxter, GE HealthCare, Endeavor Health, and others enable feedback from clinicians, engineers, and business-unit leaders.
Startups build more than pitch decks — they work toward design history file documentation (DHF), mechanical and software verification, usability testing, and manufacturability planning.
Corporate partners gain access to startups that are closer to being "pilot-ready": with defined regulatory pathways, supplier relationships, and early clinical validation.
Engagement can evolve into pilot studies, joint development agreements, supply chain partnerships, licensing, or investment.
In today’s capital-selective and hardware-dependent market, investors aren’t just looking for compelling visions—they’re looking for validated, manufacturable solutions. And founders aren’t just asking “who will fund me?” but “where can I prove this works?”
mHUB is redefining what an accelerator can be—especially in MedTech. It’s not a quick program or a single demo day. It’s operator-led, rooted in real MedTech experience, powered by a $200K investment package, and surrounded by 1,200+ engineers and builders. It functions as a full-stack launch platform for physical product innovation, helping startups reach the milestones that matter to corporates and investors.
Learn more about mHUB Accelerator Program: mhubchicago.com/accelerator