Recent Centres for Disease Control and Prevention research has reported the annual minimum direct cost of substance use disorders (SUDs) at $15,640 per affected employee enrolled in employer-sponsored insurance, totaling more than $35 billion annually. In non-specialised SUD treatment settings, research shows up to 89% of adults with SUDs may go undetected, resulting in delays in treatment, relapse, and increased costs.
This is where US startup Pelago plays a major role by providing employers the means to offer on-demand, personalised support to workers seeking to live healthier lives.
Raises $58M Series C round
In a recent development, Pelago has announced that it raised $58 million in new funding, bringing its total funding to $151 million. Existing investor Atomico (backed TestGorilla and Vaayu)led this Series C investment alongside participation from existing investors Kinnevik AB, Octopus Ventures, and Y Combinator and new investors Eight Roads and GreyMatter Capital. As part of this latest round, Atomico Partner Laura Connell will join the Pelago board.
The additional capital will help the company accelerate its product roadmap, extend its continuum of care, and advance clinical research efforts.
Virtual clinic for substance use management
Founded by Maroof Ahmed, Sarim Siddiqui, and Yusuf Sherwani in 2017, Pelago, formerly Quit Genius, is a virtual clinic for substance use management. It transforms substance use support from prevention to treatment, delivering education, management skills, and opportunities for positive change to members struggling with substance use, mostly tobacco, alcohol, or opioids.
Pelago’s cognitive behavioral therapy (CBT) and medication-assisted treatment (MAT) programs deliver convenient, accessible, and effective support that seamlessly integrates with health plans, pharmacy benefit managers, and wellness platforms.
To date, it has helped more than 750,000 members manage their substance use and improve their lives.
“I’m so proud of the work we have done to improve lives and expand access to substance use care that works. We empower employers and payers to bring our solution to their members struggling with tobacco, alcohol, or opioids, from prevention to treatment and recovery,” said Pelago CEO and Co-Founder Yusuf Sherwani, M.D. “We’re addressing a gap in the market left by employee assistance programs and mental health benefits providers who are unable to detect and treat substance use disorders. Customers are resonating with our solution as evidenced by a tenfold growth in revenue and eligible lives since our Series B two years ago.”
“Yusuf and the Pelago team are building the category-defining company in substance use management and in doing so, addressing one of this generation’s most urgent healthcare needs,” said Atomico Partner Laura Connell. “Their visionary leadership in the substance use management space, in offering treatment as an employee benefit to the world’s most forward-thinking companies, is reflected in their exceptional growth, a testament to the significant and rapidly growing demand for better solutions. Pelago’s ability to expand and accelerate access to best-in-class substance use care results in a major improvement in clinical outcomes and costs with clear and material ROI for employers. Atomico is incredibly proud to have supported the Pelago team on the journey thus far and to be doubling down on our partnership now.”
