Pelago
Overview
Pelago, known as a digital clinic focused on substance use management, was founded in 2017 by Yusuf Sherwani, Maroof Ahmed, and Sarim Siddiqui. Based in New York, Pelago emerged as the world's first virtual clinic for addiction treatment, providing personalized care for substance use disorders, particularly for tobacco, alcohol, and opioid use. By leveraging cognitive behavioral therapy (CBT) and medication-assisted treatment (MAT), Pelago aimed to revolutionize addiction care. As of 2023, Pelago had raised a total of $151 million, including a significant $58 million Series C round in 2024.
Recent Developments
- June 2024: Pelago launched the Centers of Excellence network for substance use management, aiming to enhance access to care and treatment completion while reducing costs. This initiative involves a vetting process to match members with appropriate inpatient facilities and ensure continuity of care post-discharge.
- March 2024: Pelago secured a $58 million Series C funding round led by Atomico, with participation from other investors such as Y Combinator, Octopus Ventures, and new investors like GreyMatter Capital and Eight Roads. This capital infusion was aimed at expanding Pelago's clinical research capabilities and product offerings.
- March 2024: Pelago launched a virtual therapy service for adolescents and expanded its medication-assisted treatment for substance use disorders to all 50 states.
- September 2023: Pelago made strides in strategic partnerships, teaming up with AT&T, GE Appliances, HP, Philips, and several Blue Cross Blue Shield plans, representing an access to their services for over 3.4 million lives.
- 2023: Pelago saw a 287% growth in revenue, marking an 11x revenue surge since its Series B funding in 2020. The company attributed its success to its retention rate and effectiveness in reducing annual medical claims.
Company Information
| Attribute | Information |
|---|---|
| Founding Date | 2017 |
| Headquarters | New York, USA |
| Founders | Yusuf Sherwani, Maroof Ahmed, Sarim Siddiqui |
| Revenue | Not disclosed |
| Profits | Not disclosed |
| Key Investors | Atomico, Y Combinator, Kinnevik AB, Octopus Ventures, Eight Roads, GreyMatter Capital |
| Industry | Healthcare, Digital Health |
| Number of Employees | 150 as of 2024 |
Early History
Pelago, initially known as Quit Genius, was founded in 2017 by medical school friends Yusuf Sherwani, Maroof Ahmed, and Sarim Siddiqui. The company began with a mission to address addiction through innovative technology, combining cognitive behavioral therapy with medication-assisted treatments. The founders recognized the complexities and unique experiences associated with substance use disorders and sought to develop a platform that could provide nuanced and flexible treatment approaches. By partnering with employers and health plans, Pelago avoided direct consumer sales, integrating its services into corporate wellness programs.
Company Profile and Achievements
Pelago operates as a fully virtual clinic, providing substance use management through tailored programs that include cognitive behavioral therapy and medication-assisted treatment. The company extends its reach across the U.S., working with enterprise clients to provide addiction treatment services for nicotine, alcohol, and opioid dependence.
- Expansion and Funding Success: Pelago's funding journey began with Series A funding in 2020, followed by a $64 million Series B round in 2021. The latest $58 million Series C round in 2024 underscored investor confidence in its telehealth solution.
- Strategic Partnerships: Pelago partnered with major companies, including AT&T and GE Appliances, to offer employees integrated substance use care, helping shield from ER visits and prolonged inpatient care.
- Market Impact: By 2024, Pelago's programs were adopted by over 100 enterprise clients, encompassing diverse industries such as technology, healthcare, and manufacturing.
Current Operations and Market Position
Pelago continues to lead in the digital health space, especially within the telehealth segment focusing on substance use management. The company operates entirely at-risk with performance-based contracts, leveraging CBT and MAT to provide effective treatment. Pelago's significant market presence is bolstered by its partnerships with major employers and health plans, achieving a 100% client retention rate.
Conclusion
Pelago remains a pivotal player in transforming the landscape of digital substance use treatment. Its innovative telehealth platform offers scalable solutions for employers and healthcare plans, making substance use care more accessible and cost-effective. With continuous expansion and strategic partnerships, Pelago's future trajectory looks promising in addressing the significant challenges of the addiction healthcare sector.