UK healthtech Peppy has cut staff as it adjusts to tricky headwinds for digital health startups across Europe.
Peppy, a menopause and fertility-focused employee benefits platform, confirmed the redundancies to Sifted, but declined to comment on how many staff were affected.
Headcount decreased by 34 between a peak in September and November, according to LinkedIn data — around a 15% cut to headcount.
“Like many companies in this current macroeconomic climate, we made the tough decision to reduce the size of our team,” Peppy tells Sifted, adding that it was a voluntary redundancy programme.
“Our priority during this process has been to support the affected employees in every way possible, providing them with resources, guidance and assistance in transitioning to new opportunities.”
Peppy says increasing private health insurance premiums for employers has meant other employee healthcare benefit budgets have been put on hold, impacting the company’s short-term revenue.
The redundancies come just under a year after Peppy raised a $45m Series B and announced it was doubling down on expansion to the US — following 10-fold revenue growth the previous 18 months.
Back then, founder and CEO Mridula Pore told Sifted she hoped the US business would be as large as its UK and Ireland operations by the end of 2023.
But in September, when asked about whether the company was dialling back plans in the US, Pore told Sifted that Peppy was “shifting [its] growth strategy and [has] made some organisational changes”.
“This means centralising some of our functions in the UK, but we're still working with our US clients as normal,” she added.
Peppy’s not the only European healthtech that’s struggled to crack the US market.
A number of healthtech founders — including Peppy’s Pore — told Sifted in April that higher salaries and marketing costs and the amount of homegrown competition all made the US a difficult nut to crack.
“People cost more, legal costs more, marketing costs more. Everything costs a lot more,” said Pore.
The digital health landscape
It’s been a difficult year for a number of European digital health startups.
Funding has fallen off a cliff, with startups picking up just $828m so far this year — dropping from $2.5bn across the whole of 2022, according to Dealroom — as investors draw back from a sector which typically runs on longer return cycles than other tech verticals.
The tricky fundraising environment saw the once high-flying Babylon collapse over the summer and sold for scraps, and others have been forced to make cutbacks.
In June, Livi — Swedish unicorn telehealth provider Kry’s UK operations — laid off 10% of its non-clinical staff, and remote patient monitoring platform Huma — which has picked up $217m from investors, according to Dealroom — also announced layoffs in August.
Article correction: The headline initially stated that Peppy’s revenue had dropped. Peppy’s revenue has actually grown this year, but growth has slowed.