19 Jul 2021

Our Investment in Pelago: Tackling Addictions with Digital Solutions

Over the last 18 months, the largest public health crisis for a generation has redefined our collective sense of physical and mental wellbeing. Obscure terms such as ‘social distancing’ and ‘non-pharmaceutical intervention’ have become common parlance as policy debates spilled from government corridors and offices into homes and workplaces all over the world.

As public interest in, and understanding of, infectious diseases dramatically increases, it’s easy to forget about the litany of other crises that continue to quietly pose problems to our health. Amidst important efforts to reset our relationship with public health, now is the time to apply the same vigour to making progress on seemingly intractable healthcare problems. Take addiction. Smoking causes more than 7 million deaths per year worldwide, and is responsible for almost 500,000 deaths and costs of over $300bn in the United States alone. Alcohol abuse, meanwhile, costs another 100,000 lives and $250bn each year.

Addiction is destructive, but also highly complex — stemming from social and environmental factors and deeply tied to mental health. These challenges are compounded by the stigma associated with addiction, which sees less than 8% of those suffering seek treatment. And once that treatment is underway, progress is far from straightforward. Smokers report taking 15–30 attempts to quit successfully during which time long term health damage continues, and over a third of recovering alcoholics relapse in their first year post treatment.

That’s why today we are delighted to announce our partnership with Pelago. Pelago enables employers to play a vital role in supporting their employees on issues of physical and mental wellness by delivering clinically validated care pathways for tobacco, alcohol and opioid addiction to the US and UK markets. Founded in 2017 by former doctors Yusuf, Maroof, and Sarim, Pelago has developed market leading programmes that combine counselling, digital CBT, device based performance tracking, medication and peer support.

Pelago’s most mature programme, targeting tobacco addiction, has demonstrated a 52% validated quit rate, with a five-times greater likelihood of patients quitting over the course of one year when compared to similar programs. Pelago's offer makes economic sense too: the programmes have demonstrated a 4x return on investment in the first year through savings in the healthcare costs associated with the treatment of these addictions and the health complications that they cause.

Pelago reaches people who need help by providing programmes via employers as a healthcare benefit, employing a powerful distribution channel that we have seen portfolio companies such as Hinge Health and Gympass use to scale rapidly in the past. The company has grown to 70 people across Europe and the US, and has hired leaders with world class experience in technology and healthcare at companies including Virgin Pulse, Castlight, Carrot, UCLA and Facebook, and brought onboard advisors from adjacent category leaders including Livongo and Hinge Health.

With the Series B, Pelago will accelerate their expansion and scale up in order to reach more and more of those in need across the US as they treat and recover from their addictions. In doing so, Pelago will reduce lives lost and dollars wasted.

It is our privilege to support Yusuf, Maroof, Sarim and the Pelago team on this journey.