London-based digital health startup Peppy has raised a £6.6m Series A round, another example of a new generation of employee benefit startups that are attracting capital in the post-pandemic world.
The telehealth company connects users with qualified health practitioners who can offer advice through a mobile app, by instant messaging, video consultations and live events. The company sells directly to companies that can then provide access to the app to their employees as a benefit. The round was led by Felix Capital; previous investors Outward VC, Seedcamp and Hambro Perks also participated.
“Digital health has had an amazing time during lockdown; we were in the right place at the right time with market momentum,” says Mridula Pore, cofounder of Peppy.
While Peppy’s services have centred on menopause, baby care and fertility, it aims to use the funding to scale its new and existing products — and grow an international team.
Other notable raises in the benefits space in Europe include London-based Unmind — that raised a $47m Series B in May for workplace mental health support — and Ben, that raised $2.5m from Cherry Ventures and Seedcamp to let employees choose benefits better.
Gaining market momentum
The COVID-19 pandemic has accelerated the need for new digital health services, such as Peppy’s, and demand from companies who want to provide more support to a remote workforce.
“It accelerated a lot of the underlying trends that we were seeing before the pandemic, massively. Employers are taking a proactive stance with helping their employees look after their health, and being more inclusive with the kind of help that’s offered — supporting a multigenerational, diverse workforce,” says Pore.
Peppy’s customer base has grown by 20% month-on-month over the past year, the company says.
Covid-19 has unlocked a larger dialogue between HR professionals and employees; employers are now looking for benefits that suit a hybrid workforce, as “they want equity between workers in a remote space and the office,” says Pore.
The UK is currently leading the digital health market, with 171 digital health startups founded between 2010 to 2020 — the highest of any European country. The investor sentiment points to a promising trajectory for this sector, with VC interest making it an what Pore calls an “overcrowded market”.
Next step: men’s mental health
Healthcare regulations are varied across Europe — in France and Germany, health insurance is compulsory, and isn’t considered a ‘perk’. Peppy’s plans for international expansion rely largely on the universality of its user-centric model. It’s aware that global regulations may differ, but the space in which they operate, according to Pore, is unanimous and unbridged.
“We’re not replicating medical care. We have qualified professionals, but they’re not doctors. [The existing] gap is universal; what we’re developing is a much more user-centric model of care, that helps people get the support and signposting they need to manage their own care.”
Pore said that their next point of focus would be men’s mental health, for which “there’s been a lot of appetite in the market”, as well as the health needs of the LGBT community. Now, Peppy is on course to offer employers the world’s first men’s health services.
“Any employer is going to have a given cohort of employees who are affected by these needs… A lot of our clients also have a multinational presence, so our goal for the next stage is to grow strongly in the UK, and scope ahead our path for internationalisation.”