Pelago: Substance Use Virtual Clinic Company Raises $58 Million

By Amit Chowdhry • Mar 29, 2024

Pelago – a leading digital clinic partner to U.S. businesses and health plans for substance use management – announced $58 million in new funding on the strength of customer growth and validated ROI. This funding round brought the company’s total to $151 million.

Existing investor Atomico doubled down to lead the Series C investment, with participation from all existing investors Kinnevik AB, Octopus Ventures, and Y Combinator, plus new investors Eight Roads and GreyMatter Capital. Atomico Partner Laura Connell will join the Pelago board as part of this latest round.

The additional funding will help Pelago accelerate its product roadmap, extend its continuum of care, and advance clinical research efforts.

Pelago was created on the premise that substance use is a treatable chronic condition. And the company addresses the rising rates and costs of substance misuse head-on through its 100% fees-at-risk model that delivers improved outcomes and demonstrated ROI.

Pelago’s substance use management program reduced medical claims by $9,367 per participant annually compared to a control group, delivering a 3x ROI. Over 80% of the cost savings realized in the Pelago analysis were attributable to lower medical spend, with the remainder tied to lower behavioral health costs.

Pelago provides integrated substance use management to employer and health plan populations, with specialized treatment for tobacco, alcohol, and opioid use disorders, along with support for adolescents.


“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. 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.”

– Pelago CEO and Co-Founder Yusuf Sherwani, M.D.

“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. 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, 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.”

– Atomico Partner Laura Connell

“As a company that provides our employees with a broad range of health, life and voluntary benefits, Live Nation Entertainment is proud to offer Pelago’s value-based, substance use management benefit. I congratulate Pelago on its funding raise, and I look forward to a continued strong relationship with their entire team.”

– Emily Munroe, Director, Benefits for Live Nation Entertainment