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

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Pelago Health,  Y Combinator-backed telehealth institution that uses cognitive behavioral therapy (CBT) to thief dainty group pinch tobacco, intoxicant and opioid addictions, said Thursday it had raised a $58 cardinal Series C round. 

The caller funding, which brings its full raised to $151 cardinal since being founded successful 2017, comes 2 and a half years aft Pelago, formerly known as Quit Genius, closed a Series B of $64 million amid nan COVID pandemic. 

Yusuf Sherwani, co-founder and CEO of Pelago, told TechCrunch that nan institution plans to usage nan proceeds bring connected much users, beforehand its objective investigation efforts, and create further products. Most recently, nan institution expanded its connection its virtual therapy sessions to services for adolescents crossed its footprint. The virtual clinic’s medication-assisted curen for constituent usage disorders is disposable crossed 50 states for adults and teens. It treats crossed each acuity levels on pinch co-occurring intelligence wellness conditions.

Since its Series B, Pelago has knowledgeable an awesome 11x gross surge and claims to person 100% customer retention. The institution did not supply nan baseline of its revenue. Its full-time headcount has besides tripled from 50 successful 2021 to 150, demonstrating its accelerated description , Sherwani said. 

Sherwani, Maroof Ahmed (COO), and Sarim Siddiqui (head of product) each met astatine aesculapian schoolhouse earlier going connected to recovered Pelago. The impetus for starting nan institution came aft nan trio witnessed nan devastating effects of smoking and different addictions: arsenic nan institution explains, constituent addiction and maltreatment beryllium connected a spectrum, pinch each individual’s acquisition and business needing nuanced approaches, but straightforward medicalized approaches are often not a metallic bullet. CBT and longer-term attack that comes pinch it person been shown to beryllium effective successful helping galore fig retired really to place and activity connected issues. Combing this knowledge pinch advances successful technology, and increasing acceptance for telehealth solutions, nan co-founders to create a solution platform, Pelago.

The institution does not waste straight to consumers. Instead, it partners pinch employers and healthcare use providers, who successful move supply it arsenic a service, respectively to labor aliases wellness scheme members erstwhile they are actively seeking curen for themselves (or their families if they are covered successful nan plans). The CBT is presently focused astir constituent abuse, specifically alcohol, baccy and opioids.

Pelago says its distant CBT program includes a physician-led attraction squad of physicians, nurses, counselors, and coaches. The institution diagnoses each personification and develops a personalized attraction scheme for users. Pelago members person regular sessions pinch virtual attraction teams successful nan app, consisting of wellness coaches aliases licensed supplier and intoxicant counselors. Its in-app telehealth capabilities see video and audio calling and a direct-to-therapist chat interface. Therapists besides tin petition system wellness checks for their members.It besides offers PelagoRx, a medication-assisted curen (MAT) done confidential prescriptions

Currently, Pelago has much than 100 endeavor customers crossed a assortment of industries — mining, manufacturing, technology, construction, education, and healthcare among them.

According to nan company’s website, its registered users were more than 750,000 arsenic of August 2023. TechCrunch reported that nan outfit had astir 300,000 registered users successful May 2018. 

Image Credits: Pelago founders/ Pelago

“Pelago offers its integrated constituent usage guidance to employer and wellness scheme populations, pinch specialized curen for tobacco, alcohol, and opioid usage disorders on pinch support for adolescents,” nan institution CEO told TechCrunch successful an interview.

Apart from nan truth that aesculapian approaches tin beryllium deed and miss, Sherwani said, they tin besides beryllium very expensive. According to a survey, astir 67% of adults successful nan U.S. who struggle pinch an intoxicant aliases illicit supplier usage upset stay successful nan workforce. But nan costs of treating constituent usage disorders for each individual enrolled successful employer-sponsored security tin beryllium very expensive, with an mean of a minimum of $15,640 annually

Last year, Pelago published an soul study that claimed utilizing its work reduced aesculapian claims by $9,367 annually per participant compared to a power group. According to nan CEO, its users are 5 times much apt to discontinue smoking successful 1 twelvemonth pinch nan Pelago level than different programs. 

In summation to its virtual therapy interface, nan institution is investing successful bringing much tech to carnivore connected its business. For example, it has introduced an AI-powered assistant, Pelago Chart, for objective teams to return notes much automatically.  

Existing backer Atomico, which doubled down connected nan Series C finance connected nan backmost of Pelago’s growth, led nan funding, pinch information from different erstwhile investors for illustration Kinnevik AB, Octopus Ventures and Y Combinator. New investors Eight Roads and GreyMatter Capital besides participated successful nan round.