Yusuf Sherwani

Pelago is what happens when a doctor gets impatient with geography. It is a digital clinic for substance use - tobacco, alcohol, opioids, cannabis - and Yusuf Sherwani runs it as co-founder and CEO from New York. The pitch is deceptively plain: substance use is a treatable chronic condition, so treat it like one, at the scale software allows rather than the scale a single exam room permits.

The company reaches members across all 50 states, pairs behavioral therapy with medication-assisted treatment, and sells to the employers and health plans that foot the bill for care that too often does not work. Sherwani's line for the buyers is blunt: Pelago saves money by eliminating what has become routine overpayment for ineffective treatment. It is an argument built on evidence, which suits a founder who co-authored roughly a dozen peer-reviewed studies before he ever pitched a term sheet.

He describes himself, without much fuss, as "a medical doctor by training and a technology enthusiast at heart," working "at the intersection of healthcare, technology and design." The three words in that phrase - healthcare, technology, design - are not decoration. They are the reason a smoking-cessation app grew into something he now argues could become one of the largest companies in healthcare.

The idea arrived in a respiratory clinic. Three medical students - Sherwani, Maroof Ahmed and Sarim Siddiqui, who had met on the first day of medical school at Imperial College London - watched doctors tell patient after patient to quit smoking, then send them home with no real plan for how. The instruction was correct. The pathway was missing. For Sherwani the gap was also personal: a family member had died prematurely from a smoking-related illness.

So in 2017 they built the pathway themselves and called it Quit Genius. Sherwani was not a first-time founder. He had bootstrapped two startups already - "1 modest exit, 1 failed," as he puts it - which is a founder's way of saying he had learned where the landmines were before anyone handed him real money.

The money did not come easily. In London the trio collected, by their own count, somewhere between 50 and 100 rejections. Every venture capitalist in the city, more or less, passed. Sherwani now frames those nos as the best thing that could have happened, the friction that forced the company to get sharper before it got funded.

A good name can become a cage. "Quit Genius" said one thing - quitting - and the company had grown into something wider than any single verb. In 2023 it became Pelago, drawn from "archipelago." The metaphor does the work: islands, separate but still connected and supported. No one, the thinking goes, should have to manage substance use in isolation.

The rename was not cosmetic. It reframed the category, softened the stigma, and gave the company room to treat more than cigarettes. The old name had built the reputation. The new one gave it somewhere to go.

After the London rejections, the yeses came from a specific kind of investor. The $11M Series A in 2020 was led by Octopus Ventures, with Y Combinator, StartUp Health and, notably, Serena Ventures and Venus Williams in the round. A year later the Series B ballooned to $64M and arrived oversubscribed, co-led by Kinnevik and Atomico - two firms that think in decades rather than quarters. When Sherwani explained the choice, he was precise about what he was buying: "In funding this round, we wanted to find a partner with deep healthcare expertise and a long-term approach to value creation."

That preference is telling. Healthcare does not reward the impatient. Clinical outcomes take years to prove, regulatory ground shifts underfoot, and the buyers - employers and insurers - move slowly and buy carefully. A founder who wants to build something durable in that world needs backers who will not flinch when the quarter looks flat. The $58M Series C in March 2024, again led by Atomico, brought total funding past $150M and read less like a fresh bet than a continuation of one. Kinnevik, reflecting on the company, noted revenue had climbed sharply and client retention had held near total.

There is a version of digital health that is mostly vibes - a slick app, a wellness vocabulary, and thin proof. Sherwani built the opposite kind. Before Pelago was a growth story it was a research program. He co-authored roughly a dozen peer-reviewed studies on behavioral health and substance use disorders, and that habit shaped the product's spine. The company leans on cognitive behavioral therapy, on medication-assisted treatment delivered across all 50 states, and on outcomes it can actually measure rather than merely assert.

The commercial argument follows from the clinical one. When Sherwani talks to the employers and health plans writing the checks, he does not lead with empathy - he leads with math. Ineffective substance use treatment is expensive, and it is bought repeatedly. Pelago's promise is that better outcomes cost less over time, that a chronic condition managed well is cheaper than one managed badly and forever. It is a doctor's argument dressed as a CFO's spreadsheet, and that dual fluency is much of what makes him effective.

When he is not running Pelago, Sherwani writes checks. He backs, in his own phrasing, "hungry, foolish and humble founders," a portfolio that runs from Replit and Mercury to Healthie, Curebase and Finni Health. His personal blog carries the tagline "Musings on healthcare, tech and finance" and reads like the notebook of someone who cannot stop asking questions - book reviews on artificial intelligence, essays on decision-making, a running argument that the largest company in healthcare has not been built yet.

It is a revealing hobby. Most founders defend their own island. Sherwani keeps rowing out to other people's.

Ask Sherwani where this goes and he does not talk about a bigger app. He talks about a bigger claim. In recent writing he has argued that the future of substance use care is "AI-native," and that the largest company in healthcare has, improbably, not yet been built. It is the kind of statement that sounds like hubris until you remember the person saying it once collected a hundred rejections and kept going.

The number he circles back to is 100 million - the rough count of people he wants Pelago to reach. It is an audacious figure for a company that started as a smoking-cessation tool built by three medical students who could not get a meeting. But the through-line has never really changed. A doctor saw a gap between good advice and real help. He decided the fix was not to see more patients. It was to build a way for the help to travel further than he ever could on foot.