Digital-health startups are booming. Their customers are overwhelmed.

Digital-health startups have boomed during the pandemic, raising record amounts of capital for a range of services. The message from some of their customers: Enough, already.

Corporate-benefits executives, the main customers for these startups, say they are excited about technology that can lower costs and improve employees’ health. But the explosion of activity has spawned a glut of startups pitching redundant or overpriced services, they say.

Benefits executives are pushing digital health companies to add services, merge with complementary companies and cut deals on pricing, pressure that the companies are responding to in order to stand out in the crowded sector.