When Mridula Pore launched menopause and fertility-focused employee benefits platform Peppy in 2018, she was told by investors that it was too “niche”.
“It was crazy. 5% of the UK workforce welcomes a baby into their family every year and everyone born with ovaries will go through the menopause,” she says. “It’s not niche.”
Predictably, time has proven Pore right. Five years and three fundraises later, Peppy is announcing a $45m Series B led by London-based investor AlbionVC. The round comes 18 months after the London-based startup’s Series A, during which time Peppy’s revenue grew 10-fold. It now boasts 250 clients, among them the UK operations of global corporations like Adobe and Disney.
The digital health company connects employees to healthcare professionals via messaging and video calls. Since launching it's also expanded into other areas of women’s health, men’s health and early parenthood support — and is now ramping up for a big push into the US.
The big move across the pond
“[The US is] the most sophisticated healthtech environment in the world, so we see winning there as critical to becoming a global brand,” Pore tells Sifted.
Peppy launched its American operations in Q4 last year and, by the end of this year, Pore hopes (and expects) its US business to be roughly the same size as its UK and Ireland operations.
Peppy is one of many European digital health startups to have shifted focus to the US in recent times. Many investors and founders are attracted to the vast commercial opportunity brought by serving a wealthy patient base that’s used to paying out-of-pocket for medical care. The US healthcare market is projected to be worth $17.5bn in 2023 — $5bn bigger than the European market.
For a healthcare-as-a-benefit startup like Peppy, a country like the US — where nearly half the population receive healthcare through work — makes a whole lot of sense.
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But it’ll be up against stiff competition from homegrown startups that have already hit scale. Listed fertility benefits company Progyny is one of the leaders in the space and has a market cap of $2.8bn; Carrot Fertility — another employee benefits platform — has raised a total of $114m; and menopause startup Evernow picked up a $28.5m Series A last year.
Raising during a downturn
Peppy’s raise — which Pore tells Sifted is roughly 75% equity and 25% debt — is the largest of any femtech, menopause or fertility startup since the frothy days of 2021.
Alongside AlbionVC, new investors Kathaka, MTech Capital, Simplyhealth and Sony Innovation Fund participated in the round. Previous investors Felix Capital, Hambro Perks, Outward VC and Seedcamp were also involved. Pore declined to share the valuation.
Rapid growth over the past 18 months put Peppy on strong footing when speaking to investors, says Pore. In that time, the startup secured major deals with clients like Natwest Group, Accenture and construction company Kier. Labour shortages have pushed big companies to evaluate how they attract and retain top tech talent, she says, and the solution for many of these has been investing in benefits packages.
The received wisdom 12 months ago was ‘go, go, go; spend, spend, spend’ and the market’s not there anymore
Peppy sits at the intersection of two rapidly growing sectors in European tech: health-focused employee benefits and menopause and fertility care.
Its Series B follows a year that saw fertility benefits startups like Fertifa — which raised an unannounced round — and Apryl — which picked up a $4.4m — convince investors to part with their cash. Insurtech YuLife, which gamifies wellness activities as workplace benefit, raised $120m in the summer, and menopause care startup Vira Health raised $12m in March.
But despite rising investor interest in the sector, Peppy has had to rethink plans over the past year as it adapted to the shifting macroeconomic winds, says Pore. “The received wisdom 12 months ago was ‘go, go, go; spend, spend, spend’ and the market’s not there anymore.” Now the idea is to build out different parts of the business in a more sequential way, as opposed to building everything at once, she says.
Changing attitudes to menopause and fertility
Over the past five years, shifting attitudes and greater awareness in wider society — as well as Peppy’s proven success — has made the platform an easier sell to investors and corporate customers, but it wasn’t always that way.
“Taboo topics like postpartum recovery, menopause and fertility are messy, highly emotional and sensitive topics,” says Pore. There was a lack of awareness around them — and the impact they can have on a workforce — when Peppy launched, she adds. “It felt like we were sitting on this huge news that had been hiding in plain sight. How have we as a collective society had this blindspot?”
The shift has been partly caused by the move to remote work during Covid, Pore says, which gave employees permission to talk about health challenges in a work context with their manager.
“People you work with were literally seeing into your home and the family issues that came up, and that made HR teams and business leaders developed a much greater awareness of the effect [of some health issues],” she says.
The dialogue around things like menopause has also increased in the public domain over the past few years. “It’s now [talked about] in mainstream media and discussed in HR forums and conferences,” Pore adds.