MedPal AI

‍BROKER NOTE BY JONATHAN PLANT

7th August 2025

MedPal AI should help the medicine go down...

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A classic correct prescription for the proper diagnosis 

Medpal AI¹ is addressing a fragmented data lake in an area of our lives which is literally closest to our hearts, namely health data, and looking to provide an ecosystem that uses AI to encourage preventative behaviours and marry up data with the health provider, practitioner side. 

Medpal has a team of serial tech sector IPO winners and health networking professionals with AI expertise and understanding of best practices in a freemium model which should provide an opportunity for rapid user acquisition and value realisation. (See team bios below)^3/3a

We are faced with a new era of technology where the landscape changes monthly, if not weekly. Medtech and personal health data is a captive audience. Potentially reaching everyone on the planet but we will look at what the current demand sits.

This is a sector which is seeing a holistic development. There are incentives on both sides individual and healthcare providers to better understand data, use it in bettering outcomes, and a desire to reduce costs for all whether that is reducing fraud, slashing treatment costs and ultimately premiums directly or through positive behaviours.

We have so many devices for health measurement, in the hundreds, some having connectivity with health providers and some offering advice but often these are device or platform specific and standalone, raw data. Very few have actionable interactions. MedPal uses AI and machine learning to translate raw data into meaningful insights, and predictive health alerts... the aim is for the AI to proactively monitor and notify users to provide real-time health alerts, lifestyle advice, and bio-hacks based on real-time data. Many of us will look at the data in our health apps and either turn into google-doc or ignore it. The benefits of machine learning on millions of user data-sets will allow for a personal recommendation, lifestyle nudge or even referral to the professionals if necessary.

We will show below how this personalised, value adding experience, is critical for freemium conversion rates and crucially retention rates. The captive audience of the health and MedTech sector is set up to be a large niche tool adopter as long as their experience is positive. MedPal fully understand how this eco-system breathes and has the potential to sit further along the metric curve than average. The personalisation features and early high downloads suggest they may be at an early stage similar to how best in class Spotify progressed.

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The Purpose of this note is to look at the opportunity for MedPal AI within a fragmented health device and app market in the context of becoming a leading integrator of data and personalised insights provider. 

We will look at this in terms of addressable markets for AI, healthcare provision and clinical services, wearables, private medical insurance, gym users and potential partnerships within the personal health, fitness and medical care industries. 

AI is developing at such a fast rate that a seemingly winning offering can soon be bettered. We will discuss winning strategies for successful apps and see why Medpal may have a winning combination. A nod to OpenAI’s success with a look at their thoughts on what makes AI an enduring success. 

Medpal has 3 key routes to market. Direct to Consumer DTC, partnerships, B2B & Licensing.  We will show what their fantastic tie up with ePassi² can look like and look at a starter potential for DTC and B2B. 

Regulation has bought into the digital and AI benefits for reducing costs and bettering outcomes for all. We will look at that and the current trends in fundraising and deals for the sector. 

The route from user to healthcare to clinical treatment looks to be developing quickly. The care end of the channel is awash with funding and solutions. The user front end has millions of devices and apps, many with their own ai interface, with personal data, but very little joining up with either the private medical insurance PMI /health sector nor utilising personal data to feed into clinical care. The strength seems to be once the patient has entered the testing or treatment stages. This presents an opportunity for a hub that can funnel data in, personalise it and embed it into the care sector in a value-added format. 

Medpal needs to be more than augmenting and truly demonstrate value added constant learning and improvement. They are in the right spot at the right time

The IPO³ is bringing them to a marketplace where they can scale or realise value. The 8x funds raised valuation at IPO (£2m at £16.1m market cap) mirrors recent fundraisings in a strong AI health tech market in 2025. We will look at a DCF on our revenues and net income estimates and examine what multiples current deals are being done at with Medpal looking like reasonable entry value. (Valuations section^60/61)

This provides for a material upside to share price if our assumptions are met. You can understand the basics from this introduction, numbers, valuation and the conclusion sections. The majority of the rest of the analysis you can delve into and perhaps go to some of the extensive reference list for even more detail. The final section illustrates recent developments in wearables, patient services and AI trends and recent partnerships etc

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Addressable market

Fundamentally we are focused on those who already have a tracking device and/or use digital health apps. Also, at the prevalence of private medical insurance PMI, the crossover with those tracking already, and the fact that many people have their PMI tied to their occupational benefits schemes. Within this employee group Medpal has already signed a significant partnership with ePassi² who accesses 11m UK and 17m in total employees across Europe via occupational benefit schemes. This deal alone is central to the value proposition and should demonstrate how some of the freemium metrics actually come together.

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Fragmented device market

Consumer grade and clinical grade. As long as they operate on iOS or Android then they can harness the power of Medpal. The IoT internet of things and progress within the medical industry to go down this connected route should mean that most devices are available. The future development of the device market is to have AI on Device which has obvious benefits for localised storage of data, which is crucial in the regulatory argument, but also in the efficiency of device processing. Medpal will be ideal in both worlds but in the first instance a legacy data aggregator and AI applicator for the individual.

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Device market map⁵ 

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Market growth rates

There are a number of predictions out there for the global wearables market growth.

The global wearable medical devices market size was valued at USD 91.21 billion in 2024. The market is projected to grow from USD 103.04 billion in 2025 to USD 324.73 billion by 2032, exhibiting a CAGR of 17.8% during the forecast period ⁶. North America dominated the global wearable medical devices market with a market share of 46.09% in 2024 …driven by the trend towards health consciousness and the prevalence of chronic disease conditions particualrly diabetes and cardio-vascular issues.

Global market insights forecast⁷

Wearables are becoming ever more diverse…smart jewellery like the Samsung Ring the latest iteration⁸. It does, however, highlight the benefit of Medpal. The Samsung device has health advice and recommendations based on your data but is dependent on android system alone. Samsung has a Health app just as Apple does. The success of Medpal will hinge on the convenience of its platform agnostic set up and the quality of its health insights and interactions versus other AI apps. Once the benefits of the smart premium features can be demonstrated and implemented then the value proposition of MedPal should present itself.

Similarly, US-based digital health company STAT Health has introduced a 24/7 in-ear wearable general wellness product that measures blood flow to the head to allow a better understanding of conditions in the body that occur upon standing⁹. As the world’s smallest wearable, the technology will address symptoms such as dizziness, brain fog, headaches, fainting, and fatigue, commonly associated with illnesses like long Covid, postural orthostatic tachycardia syndrome, myalgic encephalomyelitis/chronic fatigue syndrome where blood flow to the head is reduced upon standing. These conditions affect more than 13 million Americans. The device can be worn alongside 90% of other in-ear products and is shower proof. It has its own app again demonstrating great products in a fragmented market looking for a one-stop hub. 

Wearables by product type⁷

Based on operation, the wearable AI market is categorized into on-device AI and cloud-based AI¹⁰. The on-device AI segment held a market share of 64% in 2024.

The on-device ability in wearables has not only ensured that privacy regulations are adhered to but also maximizes the amount of data that can be processed in real-time. This comes hand in hand with compliance to the existing privacy regulations by eliminating the need for sensitive data to be transmitted to cloud servers and instead saving it on the device. This should encourage the further adoption of AI-enabled wearable devices as the growing apprehension of data security among users undermines the privacy issue¹⁰. 

North America dominated the global wearable AI market with a major share of over 34% in 2024. North America’s market is witnessing growth due to the increasing requirement for healthcare monitoring devices. The CDC stated the growing number of chronic conditions such as diabetes and heart disease has created a need for real-time monitoring systems. AI wearables allow for both real-time data monitoring and the ability to monitor in the future, which leads to improvement in healthcare systems, therefore increasing the market in that region.¹⁰ 

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Device usage incentives

Chronic health insurers are covering the cost for people who use wearables. As a result, the US Centers for Medicare and Medicaid Services are supportive of using telehealth care and remote monitoring, which further incorporates the use of AI devices. This becomes a self-fulfilling demand cycle. Vitality in the UK has schemes where you can pay for your wearable by achieving daily/weekly fitness points. These can work directly with fitness apps such as FiiT. An obvious extension is to aggregate all this data in to one platform and could possibly aid app adoption.

 There is a vast advancement in the technology of wearable devices, boosting their adoption among the general population. However, the high cost associated with the maintenance of these wearable devices is anticipated to limit their adoption in the market. The periodic replacement of chips, sensors, batteries, and other accessories equipped in these devices increases their overall cost among the population. These factors, coupled with limited reimbursement policies for these devices, have contributed to their limited adoption in both developed and emerging countries.⁷

MEDPAL opportunity for value end proposition devices here for those that may feel they are being priced out, may not want to upcycle device or to attract those that still haven’t adopted one.

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LIST OF TOP WEARABLE MEDICAL DEVICES COMPANIES:⁷

BD (U.S.)

Ypsomed (Switzerland)

Fitbit, Inc. (U.S.)

Apple Inc. (U.S.)

Sonova (Switzerland)

NeuroMetrix, Inc. (U.S.)

SAMSUNG (South Korea)

OMRON Healthcare, Inc. (Japan)

AiQ Smart Clothing (Taiwan)

Koninklijke Philips N.V. (Netherlands)

(See Appendix for recent developments)

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Users

A 2023 report by Watch Faces cited approximately 1.2 billion smartwatch users globally.⁷

Statista reports that the digital fitness and well-being device market (which includes apps) is expected to generate significant revenue, with an estimated 1.5 billion users in the digital health market by 2025. This includes users of fitness apps, telehealth apps, and other health-related applications.¹¹

Earwear is the most successful wearable segment, with almost 350 million units forecast to be shipped in 2024.¹¹ 

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Health Apps

US 44% of health app users are in the early majority of innovation adopter types which suggests that they are the most likely to subscribe and pay for the right apps and services¹².

Health and fitness apps have been developing to cover different users’ needs, from at-home workouts to period tracking and mental wellness. In 2024, health and wellness apps saw their downloads grow to 3.6 billion worldwide, an increase of six percent compared to the previous year. In-app purchase revenue of health and fitness apps was approximately 3.9 billion U.S. dollars in the same year; a growth of almost 500 million U.S. dollars compared to 2023.¹³

 In January 2025, global users downloaded approximately 25.15 million fitness and workout apps onto their devices.¹³

While market leaders like Fitbit and Strava have managed to secure their mobile app audiences, new health app subcategories like meditation and mental wellness apps have carved out their niche among global users¹³. Showing there is demand for a holistic health solution 

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Meditation & Wellness downloads per month in January 2025¹⁴

Health & Fitness app downloads per month in January 2025¹⁵

Covid 19 impact increased the demand for health devices and fitness tracking. Fitbit saw a huge increase in demand during the crisis¹⁶

Medical had the highest install rate by category on iOS at 16.3%, while entertainment had the lowest at 0.9%¹⁷ 

So, given the fact that the ePassi deal is going to see stats hit at least 1m in the near term, with the right marketing and momentum, this probably grows or maintains around this level for some time. With such engagement numbers MedPal has the potential for high level data input and LLM enhanced learning. This could allow for a highly personalised user experience which is one of the main benefits of the best in class Spotify app. Could this put them closer to Spotify type penetration potential than the average player?  That is more of a medium-term goal but we are in an era of easier mass digital adoption and in a health market that is desperate for holistic solutions. It might be useful to picture the metrics of what this well-established player has as this is where mega success sits. They still have 20m monthly global downloads as of June 2025¹⁸ and had 675m active users as of Q4 2024 and 263m premium subscribers¹⁹; I’m going to assume a constant 1m downloads for MedPal, to smooth what is likely to be an upward trajectory initially, but potentially smooth off over the 5Y modelling period, unless they do succeed into mass adoption. Whilst I think this will massively undershoot the activity risks apply both ways in apps as it does with investments. This will at least provide for a revenue estimate for Direct to Consumer DTC.

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As we shall discuss below it is important that users first experience is high quality and the clock is ticking. As shown above average daily usage of a health app is 4mins so you need to either hit in this period or interact with that user in a timely way. MedPal should satisfy this as it will have a large database of info for its AI to learn from. This first experience needs to be high value add but not annoying²⁰ 

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Although the graph looks like an annual renewal is at a disadvantage, by the third renewal, more than 50% churn is seen on weekly and monthly renewals and would have contributed less than the annual model.²⁰ MedPal has monthly subs and auto sign up annual renewals built into some of its trial plans. 

It is harder to keep lower duration renewals anyway so a longer focus is well-suited anyway with Health plans²⁰.

Health Cover

The 20th edition of LaingBuisson’s Health Cover UK Data Insights Report reveals a thriving health cover market valued at £7.6 billion, with private medical insurance (PMI) alone reaching £6.15 billion²¹.

The growth of health cover plans remains robust, with the market achieving 12.3% year-on-year growth, driven by increased dissatisfaction with NHS waiting times and a rising reliance on private healthcare insurance. This year’s data shows record levels of private medical cover, with over 8.06 million people, or 11.8% of the UK population, now covered by private medical insurance plans. This is a figure not seen since 2008²¹.

The UK dental cover market is also performing strongly, with combined dental insurance and capitation plans surpassing £1 billion in value for the first time²¹. 

With dental costs driven by levels of patient prevention and good oral health this could be an example of future integration of dental data.

Looking ahead, the UK health cover market is set to maintain its momentum, with projections indicating a total market value exceeding £10 billion by 2026²¹.

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Addressable market in Healthcare Tech

The global artificial intelligence in healthcare market size was estimated at USD 26.57 billion in 2024 and is expected to reach USD 36.67 billion in 2025. The global AI in healthcare market is expected to grow at a compound annual growth rate of 38.62% from 2025 to 2030 to reach USD 187.69 billion by 2030²². (Grandview research)  

Based on technology, the machine learning segment held the largest market share of over 35 % in 2024. The healthcare industry generates vast amounts of data, including electronic health records (EHRs), medical imaging, genomic data, and wearable device data. Machine learning excels at extracting valuable insights from these large and diverse datasets, enabling healthcare providers to make data-driven decisions and improve patient outcomes. This technology is extensively integrated into healthcare solutions for disease diagnosis, prognosis, and treatment planning. Leveraging patient data patterns and correlations, machine learning models can detect early disease indicators, forecast patient outcomes, and propose personalized treatment strategies, thereby enhancing the accuracy and timeliness of interventions²².

The context-aware computing segment is expected to grow at the fastest CAGR over the forecast period. AI algorithms integrate and analyse diverse data sources such as electronic health records (EHRs), real-time vital signs, medical history, environmental factors, and patient activity to understand patient context dynamically²². 

MedPal is operating in both machine learning and context-aware but will hand off the clinical elements 

Fraud detection in the healthcare sector is something that LLMs can help detect so this gives an holistic reasoning from the sector for uptake…end user, healthcare provider and practitioner…all creating efficiencies and savings which usually means a win for everyone in taxes and individual premiums

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Europe AI In Healthcare Market Trends

The Artificial Intelligence (AI) in healthcare industry in Europe is anticipated to witness significant growth during the forecast period. This can be attributed to the widespread adoption of AI technologies and increasing investments in AI by both government and private organizations. For example, in 2021, the Department of Health and Social Care in Europe allocated USD 49.3 million (£36 million) across thirty-eight AI initiatives aimed at enhancing patient care and expediting diagnosis²².

Artificial Intelligence (AI) in healthcare industry in the UK held the largest market share in the European region in 2024. AI applications are becoming increasingly prevalent in healthcare, particularly in areas such as medical imaging analysis, predictive analytics, and personalized treatment planning. The UK's National Health Service (NHS) is actively exploring AI technologies to enhance patient care, optimize operations, and tackle various healthcare challenges. In addition, supportive government initiatives are expected to propel market growth further. For instance, in April 2025, the UK government encouraged the use of AI in hospitals to improve patient care²².

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Obviously, we are looking at a fairly niche element of the AI MedTech market

Wearables have already penetrated deep into the global population so the hardware is in place. It’s natural to wear something with potential earth benefits too. 

Partnerships with corporate schemes hit a huge employee market which often focuses on health benefits in their employment packages

Health providers at large…potential for lower premium entry level driven by the adoption of MedPal pass through data

We mentioned above the increased dissatisfaction with NHS waiting times and a rising reliance on private healthcare insurance. This year’s data shows record levels of private medical cover, with over 8.06 million people, or 11.8% of the UK population, now covered by private medical insurance plans. This is a figure not seen since 2008²¹

Whilst MedPal has global potential we will concentrate on the areas where they have closer ties for now namely US, UK and EU

The addressable market for the most likely subscribers to MedPal is huge although likely to have some degree of crossover but the highlighted numbers are impressive for the first stage of captive audience.

Population figures²³ PMI data²⁴

Of the 8.06m UK PMI subs, 14% of the UK adult population now hold Private Medical Insurance (PMI), a total of 7.6 million people which has increased from 6.7 million in 2020. This is the most likely UK number to focus on. Health insurance is most popular among those in the middle of their career with 18% (1.7 million adults) of those aged 35-44 and 19% (1.6 million adults) of those aged 45-54 holding a PMI product²⁴.

The latest NHS England data shows that waiting lists hit 7.42 million in March 2025, an increase of over 3 million people compared to the backlog of 4.24 million people in March 2020 just before the pandemic struck²⁴. Which demonstrates why there may be increased demand for a product that can help make your diagnosis real-time and measurable for the healthcare provider.

US PMI is more complicated as it involves private health insurance and public schemes to help those less able to afford insurance. In 2023, most people, 92.0 percent or 305.2 million, had health insurance, either for some or all of the year²⁵.

In 2023, private health insurance coverage continued to be more prevalent than public coverage, at 65.4 percent and 36.3 percent, respectively²⁵.

Of the subtypes of health insurance coverage, employment-based insurance was the most common, covering 53.7 percent of the population for some or all of the calendar year, followed by Medicaid (18.9 percent), Medicare (18.9 percent), direct-purchase coverage (10.2 percent), TRICARE (2.6 percent), and VA and CHAMPVA coverage (1.0 percent)²⁵.

Europe is obviously quite diverse and running at various speeds of economic growth. The UK and France are the most developed so we will assume the lower bound as a target which is the UK 11% of population rate.

Gym memberships 

The proportion of people in the UK who belong to a gym has risen to 16.9%, one of the highest figures in Europe.²⁶

Europe memberships up to 71m including UK²⁷ so approximately 60m across Europe

A host of Gym stats of interest in building a picture of how they can be caught²⁸...

Approximately 44% of active gym members attend their facilities at least twice a week, indicating a strong commitment to regular exercise. However, despite the high number of memberships—around 68.9 million—nearly 67% of members report rarely or never using their memberships, showcasing a significant gap between enrolment and actual participation...could MedPal and its personalised nudges and encouragement create a refreshed gym go-er engagement and produce value for the whole fitness chain, something MedPal could leverage in deals?

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50% of gym members go to the gym at least twice a week.

The average member visits the gym 2 times per week.

32% of gym attendees go to the gym to lose weight.

44% of gym-goers prefer working out with a partner.

About 50% of new gym members quit within the first 6 months.

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Interestingly, the average gym member visits the gym about 2 times per week, with attendance peaking in January, when New Year’s resolutions drive a surge in sign-ups. Factors influencing attendance include time constraints, with 37% of individuals citing lack of time as a barrier to working out regularly. OPPORTUNITY for MedPal interactions

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Gym usage stats and areas which could easily see MedPal health interaction overlays

38% use training and workout equipment.

31% use convenience items.

30% use sports equipment.

29% work with a personal trainer.

24% use a pool.

24% use wellness facilities.

23% seek professional advice.

21% participate in coached courses and team training.

20% engage in online courses and workouts.

20% utilize sports facilities.

14% use outdoor training grounds.

14% opt for EMS (Electro Muscle Stimulation) training.

The seeking professional advice group is interesting as the following stats show that there is a longevity to membership when participating in teams/groups. Something which is key to conversion and retention for successful freemium apps as you will see later.

about 12% of members utilize specialized fitness programs designed for specific demographics, such as older adults or individuals with unique health needs.

Professional Advice: 23% seek guidance on training or nutrition.

Personal Trainers: Utilized by 29%; seen as crucial by 1 in 5 gym-goers.

Group Classes: 85% attend group activities twice weekly; 56% less likely to cancel memberships.

85% of gym-goers attend group activities twice weekly, with 43% visiting four times per week.

44% of gym attendees participate in group fitness classes.

21% of gym-goers utilize coached courses and team training.

56% of U.S. gym-goers engage in group exercise classes.

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Individuals participating in group fitness classes are 56% less likely to cancel their gym membership and more likely to renew it compared to those engaging in individual workouts. This is another example of how MedPal touching large groups of connected gym users, as is likely with the ePassi community which has a high gym membership as a benefit for its users, could see large interest in the app and such groups tend to go for high value options and stay longer if they see personalised daily contact, as we will see below. This could easily drive early sign ups for the higher tier package. This is especially so when you target groups of people like classes who exhibit repeat and loyalty characteristics.

Online workouts have surged particularly since Covid and the following usage stats are interesting in terms of users likely to see health and fitness benefits online and potential for MedPal to engage:

63% discover workouts via studio websites or social media.

26% find live streams through friends or staying up to date; 13% find on-demand this way.

12% use YouTube or Google for live streams; 38% for on-demand.

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Wearables usage

US 44% own a wearable health²⁹. 

With most, more than 80%, saying they would share information from their device with their doctor to support their health monitoring. However, less than one in four adults with or at risk for cardiovascular disease uses a wearable device.³⁰

Researchers also found that among adults with cardiovascular disease who use a wearable device, 38% use it regularly compared to almost half of other adults. Adults between the ages of 18-49, with higher household incomes, and who attended college were also more likely to report using wearable devices. Demographics and commitment to purchase and usage makes you prime to be a data provider and utiliser of feedback mechanisms³⁰.

Rock Health 2024 demographic³¹

The MedPal target markets...some work to do on trust re data amongst the younger groups and more tracker usage for the boomers+.

It is estimated that the UK penetration for health monitoring wearable devices is between 33-50%³²...we will use the US 44% as a benchmark then,

Europe is behind the UK but catching up. As of 2023 most EU members were 30%+ of wearables penetration with the mode around 35%³³

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Conversion and Penetration Rates

End Users are becoming increasingly aware of the potential benefits of AI in improving patient care, operational efficiency, and healthcare outcomes. Education initiatives and industry events help raise awareness about the capabilities and applications of AI in healthcare.

Optimising conversion from free to paid is key especially when you have high value niche AI tools…below are some drivers to look for³⁴…

Niche AI Tools: Conversion rates depend on how well the free tier showcases value. For example, a niche AI tool for video editing might offer free basic edits but lock advanced AI filters behind a paywall/gate. If onboarding is slick (e.g., personalized demos), conversion could hit 5-8%. Poor onboarding or overly generous free tiers can drop it to <1%, as users may not feel the need to upgrade.

Nuance: AI tools with strong network effects (e.g., collaboration-focused tools like AI-enhanced project management) convert better due to viral adoption. Data-driven prompts (e.g., “Upgrade to analyze 10x more data!”) boost conversions by 20-30%, per Userpilot.

Niche AI tools have lower penetration due to targeted markets (e.g., AI for legal tech or medical diagnostics). Penetration in these niches might be 5-15% of the target market (e.g., law firms or hospitals), depending on competition and marketing.

AI Market Context: The global AI market is projected to hit $174.1B in 2025, with generative AI growing 24.4% annually³⁶. Niche tools in high-demand sectors like cybersecurity or data intelligence (e.g., real-time threat detection) see faster penetration due to enterprise needs.

Niche AI Tools: Tools like AI-powered cybersecurity or health tech can see ARPU of $200-$4000/month in enterprise settings, as they target high-value clients and the B2B element can see a group fee over individual user rates. These buyers aren’t browsing for fun. They come with intent. What they care about is vendor reliability, payment protection, delivery guarantees, and integration with their systems. Does your platform support smooth transactions such as financing, tracking, insurance, procurement tools, if so the higher the ARPU climbs⁵⁸.

Consumer-facing niche tools (e.g., AI content creation) have lower ARPU ($10-$50/month)⁵⁸. DTC generally starts free then charges for features like syncing, team sharing, personalisation. The key is if your product becomes part of someone’s daily routine, the churn drops dramatically. ARPU grows when the product saves time, simplifies life or improves outcomes. Sounds familiar?

Conversion Rate Optimisation and ARPU growth requires some strong data tools. Such as A/B testing (comparing two versions of something) or even Multivariate Testing if you have high site traffic, something MedPal should have so focusing on the variables that drive engagement within the app is possible.  Calls to Action (CTAs) can push clients towards specific areas and target high-value user segments. MedPal will be doing this. Heatmaps can give a visualisation for which areas are being used the most and you can site the CTA buttons in those zones⁵⁹. 

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Nuance Freaky Friday (understanding user traits): AI-driven personalization (e.g., tailored pricing based on usage data) can boost ARPU by 11% within months, per Conversion Rate Optimisation studies. However, if free tiers are too robust, users don’t upgrade, tanking ARPU. 

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AI-Specific Retention: AI tools with high engagement (e.g., daily-use content creation tools) retain better (50-70% after month 1) than niche tools used sporadically (e.g., legal AI, 20-40%). AI-driven retention strategies, like predictive churn scores, can improve retention by 15-20%, per Forbes. This is where Medpal will have daily opportunities to engage with the data and touch the user. As long as this is seen as value-added, retentions soar.

Nuance: Retention hinges on early value delivery. Interactive onboarding (e.g., showing how an AI tool saves time) can boost month-1 retention by 10-15%. Niche tools must nail onboarding to avoid churn, especially in competitive sectors like data intelligence. #StickAround...remember we said health app users average about 4 mins per day...need to grab their attention

Challenges: Low conversion rates (1-3%) plague niche AI tools if free tiers are too generous or if premium features aren’t compelling. High churn risks exist if onboarding fails to show value fast. Resource costs (e.g., cloud infrastructure for AI) can eat into margins.

Opportunities: AI-driven personalization (e.g., Spotify’s playlist curation) boosts engagement and conversions. Niche tools can leverage AI analytics to target high-value users, increasing ARPU and retention. Viral sharing (e.g., referral incentives) can skyrocket penetration. #AIRevolution...this is where teams can play a part dragging in other users

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Regulation

Regulatory concerns Regulations such as HIPAA (Health Insurance Portability and Accountability Act) in the United States and GDPR (General Data Protection Regulation) in Europe establish standards for safeguarding patient data privacy and security. Compliance with these regulations is crucial for AI applications in healthcare to ensure the safe and secure handling of patient information, reducing the risk of data breaches and unauthorized access.

Make America Healthy Again (MAHA)³⁵

Could the fact there is an uninsured pool coming out of the Big Beautiful Bill drive people to build up the best, cost-effective model they can themselves…sign up for data monitoring, receive personal recommendations and take up premium services to assign you to clinical care at a reasonable rate?

One of the biggest AI market trends ABI Research has been covering is the increased attention to on-device AI. Generative and other AI models have predominantly been cloud-based, but scaling AI across applications faces commercial and technical challenges (including reliability, availability, cost, data privacy, and networking). To address these shortcomings, on-device AI capabilities—and eventually hybrid AI—are emerging, allowing inference workloads to be performed locally. This shift will enable more “personalized AI” solutions that can securely use user data to inform model output³⁶. 

The Medpal app and ecosystem is designed to complement not replace clinical care…partnerships with Telehealth providers should bridge the regulated, local medical advice and services angle. The platform has been specifically designed for handing off clinical needs to these companies and passing regulatory hurdles, if any, down the chain.

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Competitors³⁹

MedPal’s own sector analysis above highlights how there are distinct elements to the competition but in essence none are fully integrated in data capture, processing and personalised recommendations based on actual data. 

MedPal’s next stage is partnership with local Telehealth providers to access regulated clinical handover and advice or treatment. Their Health Guardian should be a game-changer with Conversational AI (CAI) also set to differentiate between offerings and has proven elements of trust with vulnerable societal groups; but caution is required judging whether CAI is a tool or an agent³⁷. ElevenLabs is a close partner helping to perfect this voice technology for delivery and they have a very robust safety check on misuse of their technology³⁸.

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Telehealth

Teladoc Health³⁹ divides its services into six categories: platform and program services, guidance and support, expert medical services, mental health services, telehealth, and integrated virtual care. As a technology company, Teladoc Health is involved with artificial intelligence, analytics, telehealth devices and "licensable platform services." The company uses telephone and videoconferencing software to provide on-demand remote medical care, with patients able to log on to the service at any time and be connected with a board-certified, state-licensed physician. In early January 2023, Teladoc launched a new app that combined all its services and programs. Would be an ideal partner and has massive penetration in the US.

Amwell³⁹ an enterprise platform and software company that delivers digitally enabling hybrid care in the United States and internationally. The company offers Converge, a cloud-based platform that enables health providers, payers, and innovators to provide in-person, virtual and automated care; and delivers virtual primary care, post-discharge follow-up, chronic condition management, virtual nursing, e-sitting, on-demand and scheduled virtual visits, specialty consults, automated care, and behavioural health, as well as offers specialty care programs, including dermatology, musculoskeletal care, second opinion, and cardiometabolic care for patients and members.

Nestle Health Science³⁹ is a wholly owned subsidiary of Nestlé S.A., which is a publicly traded company. While it operates with a degree of autonomy, it remains part of the larger Nestlé corporate structure. They have a wide range of brands that use the power of nutrition to help people live their healthiest lives, supporting every life stage from paediatrics to healthy aging. They may be recommended as part of MedPal user lifestyle advice or even in medical advice down the care chain

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Vitamins & Supplements sector

Now Foods³⁹ one of the natural product industry’s most recognizable brands, providing one of the most extensive lines of natural products available. NOW has always remained true to Elwood Richard’s original vision – to meet consumer need for health foods by offering affordable, high quality natural products. Still owned by the Richard family and winning awards for food science. Another lifestyle choice that could end up in the mix. Has a Sports hub providing nutritional and inspirational advice but without connectivity

Hims & Hers Health, Inc.³⁹ operates a telehealth platform that connects consumers to licensed healthcare professionals in the United States, the UK and internationally. The company offers a range of curated prescription and non-prescription health and wellness products and services available to purchase on its websites and mobile application directly by customers. As well as certain medication, prescription, and cosmetics it also has supplement products primarily focusing on general wellness, sexual health and wellness plus skincare.  Another interesting angle is medical consultation and post-consultation support services, as well as health and wellness products through wholesale partners.  Doesn’t appear to have any connectivity with devices and data. 

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Fully Integrated Health – MedPAL & who else??? To create a health guardian and connected services...MedPal looks to be in a good place relative to other players who aren’t fully joined up. Also gives them a strong chance of partnerships with best-in-class operators and further enhance the attraction of the offering.

Amazon teamed with One medical³⁹ but they could benefit from the integrated app to compete with the large-scale device apps

Meta just bought a stake in Luxottica for eye wearables access / synergies⁵⁷

Replika³⁹, with its 28 million Monthly Active Users MAUs, is an artificial intelligence (AI) chatbot that lets you design a digital character by choosing features such as skin tone, clothes, hobbies and personality traits and then interact with it via text, voice messages and calls. It was originally designed as a way to reconnect with a loved one who had passed away, hence its name.

Your chatbot can play different roles, such as a friend, sibling, mentor or romantic partner. Your chatbot’s mood is dictated by what you say, how often you communicate with it and how many gifts or coins you give it (these are in-app purchases). The paid version, Replika Pro, allows you to access enhanced features such as voice calls with your chatbot and lets you change the relationship status with your chatbot to romantic partner. There have been issues with loneliness and societal issues see the link…but conversational AI is something in the background for MedPal so take note of developments here⁴⁰.

Medicus AI works in reverse³⁹ dealing with healthcare providers 40 so far, in 14 markets touching 35m patients. is a smart platform and app that interprets and translates medical reports and health data into easy-to-understand, personalized explanations and health insights, all in an interactive experience. Your Lab report is analysed and personalised follow up advice provided. This doesn’t flow from the user currently and their own devices which is where Medpal can make inroads in what is an environment where the healthcare side is really becoming aware of the need to digitise.

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The team

As the Bios below shows the management has a lot of experience in the tech and medical space with prior history in coming to market and successfully scaling tech start ups. Their networks and AI experience should keep them at the forefront of sector developments and keep the MedPal offering flexible and relevant to a demanding user base.

Source: https://jasondrummond.co.uk/

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Political support

US Government Embraces Wearables: A Policy-Driven Tailwind for MedPal AI⁴¹

“My vision is that every American is wearing a wearable within four years... They can take responsibility. They can see in real time what food is doing to their glucose levels, their heart rates, and other metrics.” - Robert F. Kennedy Jr., U.S. Secretary of Health and Human Services.

In June 2025, U.S. Health Secretary Robert F. Kennedy Jr. unveiled a major federal initiative under the Make America Healthy Again (MAHA) agenda, aiming to encourage every American to adopt wearable health technology by 2029. This marks one of the most ambitious public health awareness campaigns in recent history.

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MedPal AI couldn’t have asked for a better piece of marketing as it sits perfectly with the offering they have.

The European Union has been keen on furthering digital health programs, and this has included embedding AI-fueled wearables into health systems. There are programs such as the EU Horizon 2020 program where there is funding for AI in wearables that help in health monitoring, preventing diseases, and customized treatment. The purpose of these initiatives is to improve healthcare services within Europe, and therefore the market for wearable AI devices that integrate with medical systems for monitoring and diagnosis in real-time is combining.

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Enhancing Digital Health Innovation in the EU with Effective Industrial Strategy Policies - A Focus on Wearable Medical Devices⁴²

UK government prepares to launch its 10-Year Health Plan aimed at shifting focus from treating sickness to preventing it, moving care from hospitals to communities, and making better use of technology⁴³ 

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Numbers

Let’s look at the metrics from the viewpoint of population, PMI penetration, gym usage, device penetration and also an extrapolation of app downloads. Then looking at industry metrics on AI and freemium models we can estimate the financials based on the likely conversion and retention rates for a niche tool like MedPal AI. I will discuss the freemium model and more strategies to maximise the metrics. Something that the MedPal team is well versed in. See their table below which aligns closely with the sources I have referenced.

Fremium model…think of best in class Spotify where AI analyses free user behaviours to target potential payers with personalised premium offerings. By harnessing AI technologies redefines the traditional business paradigms. The strategic integration of AI not only enhances user satisfaction and engagement but also yields tangible results in terms of revenue optimization⁴⁴. 

SaaS user funnel⁴⁵ the classic SaaS model.

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Medpal has an excellent acquisition model with its 3 tiers:

Direct to Consumer which will depend on webiste/app marketing techniques as well as referrals etc

Partnerships such as with ePassi² with an intended initial 1m signups suggested into basic tier annual trial

B2B Licensing & enterprise solutions…directly into companies or PMI/healthcare providers…this hits a critical group, namely teams, which have higher penetration and retention rates

Activation: literally how quickly you can move the user to the “aha moment” where they engage with your core product value…should be easy considering the data involved and what the product is designed to deliver.

Adoption: frequency of use and ability to move users into maximum features to create value proposition for them

Retention: obviously how good you are at keeping customers for a given length of time. 

Retention issues: users of AI apps tend to make monthly decisions based on experience and needs matching. Traditional methods of dealing with issues at renewal or in response to problems won’t work. You need real-time monitoring that AI analysis provides and the solutions it delivers in real-time. MedPal has a captive audience with lots of data to keep the engagement levels high. Risk scoring of users can identify and target those at risk of leaving and tailor cost-effective solutions to keep them⁴⁶

Revenue: ARPU and Lifetime Value plus strategies to cross sell and upgrade.

Freemium Model – some great insights here³⁴ which are featured in the MedPal model and should lead to strong conversion and retention rates.

 If you’re running a freemium model, focus on getting those users to their first “aha moment” fast³⁴. That’s when they realise your product solves a real problem for them. The quicker that happens, the higher your chances they’ll become long-term users—and eventually pay.

Freemium models have a 98-99% churn rate for free users (or 1% conversion typically)³⁴. Most people will leave and quickly. So, encourage value early.

B2B SaaS companies report an average freemium-to-paid conversion rate³⁴ of 4% (and we are using that in the model)

B2B isn’t immune to low freemium performance With freemium in B2B, it’s less about the individual user and more about planting the seed inside the organization. Water it with value. Give it sunlight through good user experience (UX). Then nudge it toward upgrade once the roots are deep.

However, we are dealing with a niche market here and MedPal’s analysis shown above, shows that has higher metrics. Indeed, Spotify has around a 45% free-to-paid conversion rate³⁴, which is an outlier (10x average conversion rate) but demonstrates what can happen when everything is aligned.

Spotify built their entire product to convert free users and become a funnel machine. Their free plan has ads, limitations on skipping, and quality caps. It’s good enough to show the product’s value but just annoying enough to push people toward premium.

Uniquely in freemium, music is an emotional experience. When you connect with it, you want the smoothest, most seamless version of it. That’s what Spotify sells—and sells well. Personal Health sits pretty high on the emotional spectrum too!

Design the free tier with the upgrade in mind. Make sure it showcases the core value of your product, leaving just enough friction that users want to escape it.

Make the paid version clearly more enjoyable or productive

Spotify doesn’t hide its best features behind a wall. It lets you taste them, then reminds you what you’re missing. Whether it’s offline playback or better sound, the pain of limitation is real—and it drives action. This is where MedPal’s gating of an even better experience should yield benefits.

Adding soft nudges that hint at premium perks³⁴ (blurred features, pop-ups, locked buttons). It’s a fine line…Use friction wisely—don’t make the free version unusable, but don’t make it perfect

Tie the upgrade to an emotional win (faster, easier, more enjoyable, more powerful)

Freemium works best when the user wants to pay, not just when they need to. That’s the difference between utility and experience. Spotify nailed that. Medpal should too. There are enough extra features to make the app a keeper!

Companies with over 10% conversion rates usually gate essential features³⁴

Sounds like higher conversions need to hold something back

Paid user acquisition cost is 50% lower in freemium models due to organic funnelling. Freemium can cut acquisition costs³⁴.

Add natural sharing points. Whether it’s file sharing, project invites, or team collaboration—build the share button into the experience. This could be some kind of healthy experience or lifestyle hint that a company team could experience together

Incentivise referrals. Give bonus features or credits to users who invite others.

Use freemium as a “sampler.” Let users experience just enough value that they become advocates. Focus on your time-to-value. The faster users experience something useful, the more likely they’ll talk about it.

Slack, the communication and collaboration platform, essentially a messaging app for teams, designed to streamline workplace communication and improve productivity, initially had a 30% conversion rate among engaged free teams³⁴

Teams convert better than individuals and is one of the reasons Slack was a success.

Rather than going after individual users, Slack created an experience that only makes sense when used in groups. Messages, channels, and workflows only shine when shared. The result? Free teams that actually used the product meaningfully converted at an incredible 30% rate. MedPal is obviously going after a diverse group of members and wants the individual too but the nature of the product could see benefits here from a collective focus.

What is so special about team engagement?

Internal stickiness

Collaboration quickly turns into value

Virality creates momentum as each user invites more and if you have usage limits they are hit quicker

Product-led freemium companies grow 25% faster than sales-led ones, if conversions succeed

Let the product do the selling

Users from enterprise accounts are 5x more likely to convert than individual users³⁴

Bigger teams, bigger budgets, better conversion

Why? Because enterprise users aren’t just playing around—they’re solving real problems at scale. They have complex workflows, team collaboration needs, and the budget to pay for tools that make their lives easier.

If multiple employees start using a freemium product, it becomes harder for the company to ignore. This internal traction often produces larger scale deals, and potentially an investment audience for MedPal...this is also crucial in the current funding cycle, as you will see later, as AI rivals are more likely to engage with each other in order to progress the whole. 

Having a deal such as the one with ePassi which should see 1m signups for a free basic package for 1 year is ripe for conversion and touching many company teams

DTC Direct to Consumer relevance: Limiting free plans to 14 days/2 weeks improved conversion rates by up to 70% for many companies³⁴

Scarcity creates focus

Ticking clocks make people react. That’s why time-limited freemium model, or “free trials with limits”, convert so well.

Companies that switched from unlimited free plans to 14-day trials saw conversion rates climb by as much as 70%.³⁴ That is powerful and aligns with MedPal’s limited free trial for DTC

Having some immediacy makes users explore your product straight away, and when the trial ends, they’ve either seen the value or not and will decide either way thus reducing acquisition costs

One of the strongest predictors of conversion is depth of use. If a user engages with 3+ core features, they’re 4x more likely to upgrade³⁴ because each new feature creates a new point of value. The more integrated a product becomes in someone’s workflow, the harder it is to walk away.

As the Medpal offering shows in terms of onboarding users it’s not about showing everything. It’s about helping users experience multiple useful tools quickly.

The Slack model⁴⁷:

With a freemium conversion rate of over 30%, Slack offers a solid user onboarding experience and a generous freemium plan with free features which allow users to realize how valuable the tool is but not to satisfy their needs completely.

For example, they impose limits on how far back you can search for messages. When a user tries searching for one that’s older than 90 days, they trigger an in-app prompt to upgrade⁴⁷. 

The Medpal AI app offers free basic health assessments for a limited period, with basic and then premium features (e.g., advanced diagnostics, doctor or specialist matching, or comprehensive reports and image analysis) gated behind a paywall, This aligns with health tech apps like Teladoc³⁹ or Replika³⁹, which use subscriptions or in-app purchases.

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Does Medpal have the Right solution? 

Miqdad Jaffer, Product Lead at OpenAI, recently posted about the New Playbook for Product-Market Fit (MPF) in AI Startups, discussing why the old frameworks are failing in 2025, and how to build AI products that scale⁴⁸.

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Key points:

Achieving PMF in the AI era is both easier and harder than ever before.

Easier: because AI can help you iterate faster, understand users better, and build more personalized solutions than ever before. You can prototype in days, not months. You can analyse user behaviour patterns that would have taken armies of analysts to uncover.

Harder: because user expectations have skyrocketed. Users now expect AI products to be intelligent, predictive, and almost magical in their capabilities. They compare every AI product to ChatGPT, regardless of the use case. The bar for "good enough" has never been higher.

Users definition of what is excellent or “intelligent enough” is changing monthly based on interaction with better AI systems elsewhere. 

Jaffer talks of an AI PMF Paradox: you need to achieve a fit with a market that's constantly evolving its expectations of what AI should do.

The piece is well worth a read to see how one of the leaders in the Space has seen things develop. 

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MedPal has identified a pain point in the MedTech cycle, the fragmentation, which in an era where individuals and healthcare providers are desperate for data collection and processing, allows for them to potentially capture a significant proportion to push them towards a viral outcome. But they must keep evolving; the additional user needs to influence the learning experience of other users to differentiate from staying with a device specific offering. 

The premium experience needs to further this differentiation. Augmenting tools will go so far but the winners either keep innovating or they provide a constantly evolving interaction with the user that keeps them hooked.

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A final quote from Jaffer on successful AI growth sits well with the plans to move into the premium segments and also the chances to cross-sell down the line:

"The most successful AI products I've seen don't just solve problems—they get smarter at solving problems over time," I often tell founders. "That's your ultimate competitive moat." AI products that achieve true PMF create compounding advantages that traditional software simply can't match.

Every user interaction improves your model. Every edge case you handle makes your AI more robust. Every successful outcome strengthens user trust and drives organic growth. This is why AI PMF, when done right, can create nearly unassailable competitive positions.

"The companies that master AI PMF won't just win their initial markets," I predict. "They'll expand into adjacent markets faster than any traditional software company ever could, because their AI gets smarter across domains." 

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A classically conservative Hockey Stick⁴⁹...

There are so many levers to the MedPal model that we could pull but I’m leaning towards being conservative which sounds bizarre given the speed of revenue growth in there. If they can demonstrate best in class behaviours within a niche environment that we have shown above then conversion and retention rates can be much higher than what is in the table. 

DTC: The ePassi deal is significant as not only will it see at least 1m signups but they will all have to download the app. That will be significantly serving as it will push MedPal towards the top downloads area immediately which should keep the ball rolling. So we have assumed a constant 1m downloads per month. This is conservative given the addressable market we showed across PMI, Gym users and wearable users but allows for an element of smoothing over a 5 year period. We can adjust this as data comes in.

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Partnerships

As there are multiple ways of hitting teams in the ePassi environment and particularly in occupational schemes and gym classes the viral nature of introductions should fire the site traffic. We’ve assumed further penetration into the ePassi membership to reach 3.25m by 2030 c. 19% of their 17m users. It could be that more members try earlier than thought but MedPal will have to perform well to keep a high proportion.

B2B Licensing & Enterprise Solutions: we’ve assumed a smaller scale hockey stick then the ePassi partnership expecting momentum to see 60k signups in 2025 followed by 80k in 2026 with the rollout of premium driving conversions across this period. From there as the table above shows we are running the total signups down in the hockey stick fashion. Both of these partnership estimates for contracts assume 30% passive basic signup/auto enrolment and we assume a 50% retention rate at 6m intervals, with a 10% signup for Premium users annually, but smoothed monthly, which sees a 65% retention adjustment every 6 months.

This conservative nature allows for contract announcements to have significant impact on the numbers if and when they land. Particularly in the outer years where the momentum relative to the addressable market could have a material uplift if Medpal achieves mainstream adoption. As always there is no guarantee of performance and we highlight some of the risks in a section below.

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We run the DCF for fully paid and also fully diluted including options and warrants outstanding for both estimated revenues and for net income, given that Medpal believe they have low costs and overheads with 10 developers and 4 other employees and should run at a 70% gross margin.  We assume 10%-15% WACC range but will use 15% until the company has proven the numbers and de-risked the model...

...and a perpetual growth rate of 5% which is in line with the current US GDP nominal rate. We also provide a US$ number, at an fx rate of £/$ 1.3482 as of July 12th, 2025, to allow for comparisons with US peers

The DCF model doubles in value with a change in WACC from 15 to 10%.

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Given that MedPal comes to market cash positive, with an additional £1.6m of raised IPO funds, and is likely to be cash generative quite quickly, there is a big argument that they should be closer to the lower weighted WACC 10% but the difference is really to illustrate the potential gearing of the model should they be successful quickly.

The following benchmark analysis by Finbox⁵⁰ image below suggests the IT sector WACC ranges between 8-17.7% with a mean of 9.9% and the AI Tech Solution company sat at 15.5% as an example.

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Valuations

There has been lots of activity in AI Healthtech in H1 2025:

H1 2025 saw a modest increase in digital health venture funding compared to the past two years. Investors poured $6.4B into US-based digital health companies across 245 deals in the first half of the year, up from $6.0B in H1 2024 and $6.2B in H1 2023. In Q2 alone, the sector brought in $3.4B in venture funding—up from the average of $2.6B per quarter since Q1 2023³⁵. 

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A lack of healthworker numbers is literally giving birth to agentic AI to fill the void and free up manual treatment time. A lot of the relevant crossover for Medpal is that the clinical side is digitising and delivering personalisation but mainly after or around referral for care. Medpal can go upstream and help with prevention and then handover of data and patients into this now welcoming stream.

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 AI Revenue Multiples :Trends across niches⁵⁶

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The Finrofca analysis⁵⁶ reveals that AI companies maintain an average revenue multiple of 23.4x, highlighting robust valuations across the industry for 2025 so far.

Health Tech and Cybersecurity continue to attract strong investor interest due to the essential nature of their solutions. As regulatory and enterprise focus grows, these sectors are expected to sustain their upward trajectory.

Health Tech: 2025 EV/Revenue Multiple: 28.8x 

Why It’s Leading: Health Tech startups are revolutionizing healthcare through AI-powered diagnostics, patient monitoring, and drug discovery. Their solutions address critical societal challenges, ensuring sustained investor interest. 

Growth Drivers:

Increased adoption of AI in clinical settings.

Focus on cost reduction and efficiency in healthcare delivery.

Regulatory support for AI-driven innovations in healthcare

The graphs above⁵⁶ show a bias to valuation if looking at a public company.

Investor excitement about healthcare AI is propelling the market. AI-enabled startups pocketed the lion's share of venture capital funding in 2025 so far, capturing 62% of venture capital dollars, or $3.95 billion⁵¹.

These companies, on average, raised $34.4 million in funding per round—an eye-popping 83% premium compared to the $18.8 million of their non-AI-enabled counterparts. The average series A and series B deal sizes for AI-enabled startups were $24.4 million and $54.8 million respectively compared to $15.6 million and $39.6 million for non-AI-enabled digital health companies⁵¹.

Based on FY26 estimates: 

You can see an EV range of £0.79bn - £1.38bn as a possible range if MedPal achieved the revenues and the market assigned them the sector average ratings.

Looking across all the comparisons I think it is prudent to have a 12m price target of £1 or a market cap of £383m as they have already secured the ePassi deal³ and could have some early momentum on other deals and signups as a result.

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Conclusion

MedPal has identified a gap in the fragmented wearable and health data apps market. So many devices (100s of millions) different operating systems (iOS and Android) and a plethora of health apps (multi thousands). AI creating personalised insights and health tips to millions after analysing a massive database of real-time actual data. This opens up attractive opportunities to partner with the healthcare side and help produce better outcomes throughout the chain. More disease prevention, lower insurance premiums and costs for the user+clinicians and more accurate data for disease screening, treatment and drug production. 

They have an immediate head start with ePassi and 1m signups in the occupational health sector which also hits the crossover sets of gym and tracker users. We’ve shown above the higher likelihood of this group using and paying for niche tools. Within them they have teams which also tend to be power users of good AI. If you can hit them early and with value added then retention is high. 

MedPal has the tech and successful marketing knowledge to thrive and has a captive audience. We have modelled conservatively, whilst acknowledging things could underperform, but they could have a product with the ability to machine learn such that it goes viral. 

The premium package which will harness telehealth benefits and potentially complete the holistic nature for the user, is the integrated health goal that should realise the full value of MedPal AI

The IPO is raising £2m at a valuation of £16.1m (8x) and that sits well alongside recent funding ratios in the sector such as OpenEvidence raising $210m vs a $3.5bn valuation (16.66x)⁶⁰

Abridge, a startup that has automated doctors’ note-taking with artificial intelligence, on Tuesday the 24^th June said it had raised $300 million in funding⁶¹. The round, led by venture-capital firm Andreessen Horowitz with participation from Khosla Ventures, values the startup at $5.3 billion (17.66x). In February, Abridge raised $250 million at a valuation of $2.75 billion (11x). So MedPal is raising money at the lower end of recent deal metrics.

MedPal is cash positive going to market and this adds £1.05m(ex-costs) for the following intentions^note3/3a: (The percentages remain the same scaled by 2x for the cash amounts)

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The DCF calculations show for gross revenues and …for net income, allowing for fully paid shares and also for fully diluted after options and warrants are accounted for. We also show for a 10-15%wacc. 

In terms of revenue multiples AI at 23.4x and HealthTech sector average 28.85x provides for a near £1bn valuation or £700m on net income basis based on FY26 revenues of £48m. That assumes everything going well initially and there may be some delay in rolling out products and versions. We also have the state of the Aim market in terms of liquidity but AI tech in vogue on whatever platform it is trading. Evidence has leaned towards public companies commanding higher ratings and share prices as shown above.

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Overall these metrics suggest that a 12m price target of £1 is fair allowing for underperformance against the model with the knowledge that MedPal is set up for a geared performance if contract wins and further deals come to fruition quickly

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We have a company here that quite possibly could marry up your physical and financial health. From an investment perspective they are marrying up expertise in monetising AI and MedTech innovation to provide an integrated Health opportunity in a landscape which has been predominantly isolated data and reactive care solutions.

MedPal is a next-gen digital health companion focused on early detection, and personalised wellness — while complementing, not replacing, clinical care. Their own diagram^note3a illustrates the offering in a simple form

AI-powered insights with live data from 200+ devices and potentially millions of data point users. This feels like it’s worth dipping into that natural sugar recommended bowl and taking a spoonful of opportunity.

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Appendices

Specific Risks

Lower downloads, conversion and retention rates than anticipated for DTC.

Delay in signing up the 1m free trial ePassi users

AI LLM models either fail, are superceded without the ability to replace, or are bettered by competition.

Lack of deals with Telehealth partners

Device providers or operating platforms create a viable rival to the Medpal app

Existing Contract losses

Development delays for premium features

The AIM market continues to see low volumes and lack of recognition of underlying business performance

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Recent Developments

There is a lot happening, mainly on the patient side, with AI seeing lots of investment in the healthcare chain but these charts from RockHealth⁵² highlight the trends that MedPal could quickly engage in with what is being described as leapfrogging:

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Tapestry weaving⁵² by which companies use strategic mergers and acquisitions to stitch together new features and capabilities into their healthcare offerings.

“The current dominant M&A thesis is that for larger healthcare players with strong distribution, acquiring startups that can use those distribution channels over and over again is the right play. When executed correctly, combining new technologies with distribution results in immediate ROI.”

– Travis May, CEO, Shaper Capital

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Modular tech stacks⁵²...think of larger players having a stack of different LLMs that are optimal for different tasks rather than just one. This was the power of DeepSeek as it reduced search costs due to only searching in the most likely LLMs per task, switching off other inputs. Could MedPal’s LLM be seen as an ideal connector of device users into the eco-system or do they look to add on other LLMs into their tech stack…flexibility key. Players like Lumeris are prioritizing the system flexibility of modular tech stacks as a guiding strategy. In Lumeris’ case, their newly-launched Primary Care as a Service agentic AI platform—dubbed ‘Tom’—is leveraging best of breed capabilities amongst 60+ LLMs that can be interchanged for various use cases.

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Platform and Channel Partners⁵²

“Channel partnerships, if done right, can be very successful. Sales cycles are long for healthcare, and for startups, channel partnerships allow you to ‘skip the line’ and acquire customers more quickly in the early stages. But the wrong channel partner is just as bad as the good channel partner is beneficial, so you need to select partners who are top in their class.”

– Michelle Davey, CEO, Wheel

Medpal and ePassi looks to be a classic good channel partner here.

Amazon’s Health Benefits Connector to Teladoc’s Connected Care Program.

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This clearly shows how quickly a partnership with the right people creates the holistic offering with the bottom-up care so onboard. The Amazon process requires a qualification for the specific care partners. MedPal could be an aggregator of qualifying data to feed this chain

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Finally, Engaging disruptors⁵². As the article suggests sounds counter-intuitive, but Instead of viewing innovators as outright competitors, engaging with rivals may position larger enterprises as partners, investors, or future acquirers of potential rivals. Eli Lilly partnered with virtual care platform Ro to offer consumers access to lower-cost vials of Zepbound.

There are also subtler examples, like Labcorp’s recent participation in Teal Health’s $10M raise, investing in an at-home, self-collecting cervical cancer screening device that redefines the traditional, in-office pap test.

Nvidia’s venture arm backs $17m hippocratic AI buildout which has created 19 different agentic AI nurses to deal directly in real -time with patients. With an emphasis on “do no harm” …they have built their own specific LLM. This would be the ultimate kind of Telehealth back-end experience⁵³.

By combining Huma’s platform with Wheel Health’s virtual care capabilities, the partnership will enhance accessibility, personalisation, and insights across diverse patient programmes and therapeutic areas⁵⁴.

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Huma CEO and founder Dan Vahdat said: “Today’s system, where patients navigate scheduling, wait weeks to be seen, and deal with inconsistent or rushed care, frustrates stakeholders across the board.

“By partnering with Wheel, we aim to redefine this experience, combining consumer-centric virtual care with cutting-edge technology to deliver better outcomes, greater convenience, and even moments of delight while giving people back valuable time in their lives.”

The partnership will create a unified platform that supports clinicians with advanced tools, smarter decision-making, and reduced administrative tasks.

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“Currently, only a third of AI pilots successfully scale to full system-wide deployment. To improve those odds, vendors need to earn customer trust, which requires highly secure, accurate, easy-to-use tools. It’s also equally important for pilots to demonstrate consistent end-user engagement or an easy-to-measure ROI. Make it a no-brainer for health systems to adopt.⁵²”
—Sofia Guerra, Vice President, Bessemer Venture Partners

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MedPal needs to evolve quickly in showing its “must have” adoption rates and partnering with already “digitally bought-in” telehealth players

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In April 2025, HelloCareAI raised USD 47 million to expand its AI-driven virtual care platform for smart hospitals. The initiative focuses on enhancing patient care through AI-assisted nursing, remote monitoring, and efficient workflow management²².

In February 2025, Innovaccer launched "Agents of Care," AI-powered assistants designed to combat burnout among healthcare professionals. These agents automate routine administrative tasks, enhancing operational efficiency and enabling healthcare professionals to dedicate more time to patient interactions²².

In January 2025, VitVio secured USD 2.05 million in pre-seed funding to develop AI-powered operating rooms to enhance surgical efficiency and patient safety.²²

In September 2024, Huawei Launched Medical Technology Digitalization 2.0 Solution to facilitate precision healthcare with AI²².

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In June 2024, the National Health Research Institute (NHRI) and Chang Gung Memorial Hospital (CGMH) adopted NVIDIA's accelerated computing and generative AI technologies to advance biomedical research²².

“The use of AI in healthcare will fundamentally change the way we approach disease prevention and treatment. With AI’s ability to analyze vast amounts of data quickly and accurately, we can develop personalized medicine strategies and early intervention methods that were previously unattainable.”

Dr. Hung-Yi Chiou, director of the Institute of Population Health Sciences (IPHS) at NHRI²².

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In March 2024, Microsoft collaborated with NVIDIA to enhance AI innovation and accelerate computing capabilities. This collaboration leverages Microsoft Azure's global scale and advanced computing along with NVIDIA's DGX Cloud, and Clara suite, to accelerate innovation and improve patient care.

“Microsoft is building on its longstanding collaboration with NVIDIA to empower the healthcare and life sciences industry with the power of Azure and generative AI, helping unlock new horizons for clinical research, drug discovery and patient care worldwide. Through this collaboration, we aim to help the industry unlock breakthroughs in healthcare, making care more precise, accessible and effective to deliver a meaningful difference in the lives of patients globally.”

Peter Durlach, corporate vice president, Health & Life Sciences, Microsoft²²

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In March 2024, NVIDIA introduced new Generative AI Microservices to transform medical technology (MedTech), drug discovery, and digital health. This innovative approach aims to reshape healthcare technology by harnessing advanced artificial intelligence (AI) capabilities.

“For the first time in history, we can represent the world of biology and chemistry in a computer, making computer-aided drug discovery possible. By helping healthcare companies easily build and manage AI solutions, we’re enabling them to harness the full power and potential of generative AI.”

Kimberly Powell, vice president of healthcare at NVIDIA²²

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In September 2023, Merck KGaA entered into a strategic collaboration with Exscientia and BenevolentAI to drive accelerated drug discovery with the integration of high-end AI platforms²².

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Fundraising
ai-meets-healthtech-10-promising-european-startups-leading-the-change-in-2025⁵⁵

H1 2025 market overview: Proof in the pudding³⁵

Wearble developments

January 2024: Fitbit Inc., collaborated with Quest Diagnostics, one of the leaders in diagnostic information services, with an aim to advance their research on the use of wearable devices to improve metabolic health among the general population⁴.

January 2024: Concha Labs announced the launch of an enhanced OTC hearing aid, SoundScope, featuring hearing personalization technology designed to help people hear more clearly⁴.

October 2023: Medtronic received approval from the U.S. FDA for wearable Aurora EV-ICD MRI SureScan extravascular implantable cardioverter-defibrillator and Epsila EV MRI SureScan defibrillation lead offering defibrillation among patients⁴.

June 2023: STAT Health launched a first-in-ear wearable that measures blood flow to the head and enables patients to understand their body conditions^4&9.

April 2023: Noise launched ColorFit Ore smartwatch with always-on-display, 7-day battery life, and other advanced features with an aim to strengthen its presence in the wearable devices industry⁴.

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