YC-backed Pelago, a virtual clinic for addiction treatment, raises $58M Series C

YC-backed Pelago, a virtual clinic for addiction treatment, raises $58M Series C post thumbnail image

Pelago Health,  Y Combinator-backed telehealth firm that makes use of cognitive behavioral therapy (CBT) to assist deal with individuals with tobacco, alcohol and opioid addictions, mentioned Thursday it had raised a $58 million Collection C spherical. 

The current funding, which brings its complete raised to $151 million since being based in 2017, comes two and a half years after Pelago, previously often known as Quit Genius, closed a Series B of $64 million amid the COVID pandemic. 

Yusuf Sherwani, co-founder and CEO of Pelago, instructed TechCrunch that the corporate plans to make use of the proceeds carry on extra customers, advance its medical analysis efforts, and develop additional merchandise. Most lately, the corporate expanded its provide its digital remedy classes to companies for adolescents throughout its footprint. The digital clinic’s medication-assisted remedy for substance use problems is obtainable throughout 50 states for adults and teenagers. It treats throughout all acuity ranges together with co-occurring psychological well being situations.

Since its Collection B, Pelago has skilled a powerful 11x income surge and claims to have 100% consumer retention. The corporate didn’t present the baseline of its income. Its full-time headcount has additionally tripled from 50 in 2021 to 150, demonstrating its speedy enlargement, Sherwani mentioned. 

Sherwani, Maroof Ahmed (COO), and Sarim Siddiqui (head of product) all met at medical faculty earlier than occurring to discovered Pelago. The impetus for beginning the corporate got here after the trio witnessed the devastating results of smoking and different addictions: as the corporate explains, substance habit and abuse exist on a spectrum, with each particular person’s expertise and state of affairs needing nuanced approaches, however simple medicalized approaches are sometimes not a silver bullet. CBT and longer-term strategy that comes with it have been shown to be effective in serving to many determine find out how to determine and work on points. Combing this data with advances in expertise, and rising acceptance for telehealth options, the co-founders to create an answer platform, Pelago.

The corporate doesn’t promote on to shoppers. As an alternative, it companions with employers and healthcare profit suppliers, who in flip present it as a service, respectively to workers or well being plan members when they’re actively looking for remedy for themselves (or their households if they’re coated within the plans). The CBT is at the moment centered round substance abuse, particularly alcohol, tobacco and opioids.

Pelago says its remote CBT program features a physician-led care crew of physicians, nurses, counselors, and coaches. The corporate diagnoses every person and develops a customized care plan for customers. Pelago members have common classes with digital care groups within the app, consisting of well being coaches or licensed drug and alcohol counselors. Its in-app telehealth capabilities embody video and audio calling and a direct-to-therapist chat interface. Therapists can also request structured wellness checks for his or her members.It additionally presents PelagoRx, a medication-assisted remedy (MAT) via confidential prescriptions

At present, Pelago has greater than 100 enterprise clients throughout quite a lot of industries — mining, manufacturing, expertise, building, schooling, and healthcare amongst them.

In response to the corporate’s web site, its registered customers had been more than 750,000 as of August 2023. TechCrunch reported that the outfit had round 300,000 registered customers in Could 2018. 

Picture Credit: Pelago founders/ Pelago

“Pelago presents its built-in substance use administration to employer and well being plan populations, with specialised remedy for tobacco, alcohol, and opioid use problems together with help for adolescents,” the corporate CEO instructed TechCrunch in an interview.

Aside from the truth that medical approaches might be hit or miss, Sherwani mentioned, they can be very costly. In response to a survey, round 67% of adults within the U.S. who wrestle with an alcohol or illicit drug use dysfunction stay within the workforce. However the price of treating substance use problems for every particular person enrolled in employer-sponsored insurance coverage might be very costly, with an average of a minimum of $15,640 annually

Final yr, Pelago printed an inside research that claimed utilizing its service reduced medical claims by $9,367 annually per participant in comparison with a management group. In response to the CEO, its customers are 5 instances extra more likely to give up smoking in a single yr with the Pelago platform than different packages. 

Along with its digital remedy interface, the corporate is investing in bringing extra tech to bear on its enterprise. For instance, it has launched an AI-powered assistant, Pelago Chart, for medical groups to take notes extra mechanically.  

Present backer Atomico, which doubled down on the Collection C funding on the again of Pelago’s progress, led the funding, with participation from different earlier buyers like Kinnevik AB, Octopus Ventures and Y Combinator. New buyers Eight Roads and GreyMatter Capital additionally participated within the spherical. 

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