Digital substance use management platform Pelago, formerly Quit Genius, announced it secured $58 million in Series C funding, bringing its total raise to $151 million.
Existing investor Atomico led the round with participation from other continuing investors, including Octopus Ventures, Y Combinator and Kinnevik AB. New investors GreyMatter Capital and Eight Roads also participated.
Laura Connell, partner at Atomico, will join the company’s board of directors.
WHAT IT DOES
Pelago, founded in 2015, works with health plans, employers and individual members to offer adults and adolescents personalized virtual substance use care, including treatment for alcohol, tobacco and opioid use.
Members connect to a physician-led care team and can receive complex condition management, cognitive behavioral therapy, and educational content. The company also provides a hub for medication-assisted treatment and remote monitoring tools, such as breathalyzers and urinary test kits, for at-home use.
Pelago will use the funds to accelerate its product roadmap, conduct clinical research and grow its continuum of care.
“This funding demonstrates strong investor confidence in our growth trajectory and reflects our dominance of the substance use management space. That trajectory includes a tenfold growth in revenue and eligible lives covered since our Series B round two years ago,” Dr. Yusuf Sherwani, Pelago’s CEO and cofounder, told MobiHealthNews in an email.
“This fundraise helps advance our mission to break down barriers to substance use care that works. I’m incredibly grateful for the employers and payers that we’ve empowered to address substance use head-on by delivering specialized treatment and evidence-based care to their members, supported by powerful outcomes data and validated ROI.”
MARKET SNAPSHOT
The majority of direct costs associated with substance use disorders in the U.S. are incurred primarily among the working-age population, according to research published in JAMA Network. Employers and health insurance payers may offset those high costs by considering prevention and treatment strategies.
The digital addiction treatment company rebranded from Quit Genius last year, two years after it closed a $64 million Series B funding round. The company garnered $11 million in Series A funding in 2020.
There have been several other startups with digital tools for addiction. Perhaps most notable is Pear Therapeutics, which offered a line of digital therapeutics for substance abuse but filed for bankruptcy in April of last year. Its assets were sold at auction for $6.05 million a month later.
Bicycle Health is another company in the space, offering virtual opioid use disorder treatment.
Bicycle announced last year it formed a partnership with compassionate care provider Wellpath to provide formerly incarcerated individuals access to buprenorphine monthly injections for opioid use disorder via the Federal Bureau of Prisons and residential reentry centers.
Other companies include virtual alcohol use disorder treatment company Ria Health, virtual addiction treatment platform Workit Health and digital smoking-cessation company Carrot.
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