Rethinking Employee Wellness Models: Atomico’s Investment in Pelago

A corporate reckoning in mental and physical wellbeing

Matters of wellbeing — both physical and mental — have never been more front of mind than they are right now. Campaigns that seek to encourage open and frank conversations about health are more common than ever, while an array of products have flooded the self-care and wellness spaces to promise consumers a path to better wellbeing.

COVID-19 has only accelerated the trend. While governments and businesses have strained to adapt to the huge physical and mental toll of the pandemic, an equally profound opportunity has presented itself in the digitisation of delivery of products that cater to those needs. The last 18 months have been a forced experiment assessing whether it is possible to deliver quality, accessible healthcare virtually.

Employers are increasingly seen as playing a vital role in supporting their employees on issues of physical and mental wellness. ‘Employee Health and Wellness’ has foregrounded itself as a key issue at the executive level as people demand more than just token gestures and ‘wellness hours’ as compensation for the hard work they provide. Sustained commitment to the wellbeing of employees is increasingly becoming a differentiating factor in attracting and retaining the best talent, especially as people begin to untangle their home and working lives.

Working on wellness with Gympass and Hinge Health

Over the past 5 years, we have had the privilege of working with two incredible companies in the physical and mental health and wellbeing space since Series A, who have both scaled to become global category leaders — $2.2B Gympass and $3B Hinge Health.

Hiro serves on the board of Gympass, working with Cesar and the team as they build the world’s largest corporate fitness platform, scaling from Brazil through the rest of Latin America, Europe, and the United States. With more than 3,000 corporate clients, 50,000 gyms and studios, 60 wellness apps, thousands of personal trainers, and hundreds of thousands of members, Gympass is a clear leader in corporate health and wellness.

The Gympass online platform allows employers to provide a cost effective and highly desirable fitness benefit to their organisations, and users to access top physical and digital fitness class and health and wellbeing apps at a much lower cost than going directly. We’re hugely excited to see the inroads Gympass is making in physical wellbeing, but also new areas such as mental health, nutrition, and personal training.

Meanwhile, I sit on the board of Hinge Health, where Dan, Gabriel and the team have built the market leading digital musculoskeletal solution in the US. The company now works with over 300 employers and health plans to provide best-in-class digitally delivered care with industry-leading clinical and patient outcomes. As a result, Hinge Health continues to proudly pioneer the world’s most patient-centered Digital Clinic.

The B2B2C opportunity

The journeys of Gympass and Hinge Health have been hugely instructive for us at Atomico, demonstrating first hand the power of the employer benefits model to allow leading products in this category to rapidly scale. This progress has illuminated the ‘B2B2C’ category and has clearly articulated the ingredients that drive better outcomes for both employers and employees in the space:

• Customer network effects are hugely influential, meaning that when a wellness benefit becomes a ‘must have’ amongst the employees of one company in a given industry or market, other companies competing for the same talent will also have to offer this.
• Benefit provider brand makes a real difference, as companies that look to offer best in class benefits to their employers want to buy from the #1 provider in the market, rather than a second tier solution that won’t deliver the same results.
• Clearly defined sales channels, which include sophisticated consultants and close groups and networks of corporate benefits leaders, mean that a well performing commercial organisation can deliver an efficient and targeted sales motion.
• Employer-provider co-marketing when done effectively enables the provider to maximise the maximise the reach and impact of their solutions among end employees, thereby improving care outcomes and employer ROI.

Quit Genius: A new frontier of B2B2C wellbeing

Today, we are delighted to announce our investment in Quit Genius, taking the B2B2C wellbeing model to a new frontier in treating physical and mental health. The Quit Genius team are bringing a digitally delivered solution as an employee health benefit to tackle the $500bn challenge and hugely devastating effects of substance abuse and addiction in the US.

In Quit Genius, we have seen many of those same elements that we believe make companies in this category truly successful:

• A compelling digital product combining human and digital coaching, engaging content and other elements that drive adherence and engagement.
• Clinically validated care outcomes and best in class user engagement.
• A strong commercial organisation with significant expertise in leveraging the benefits go to market channels in the US.
• An ambitious and mission driving founding team eager to make the lives of their users better.

We are hugely excited to be partnering with a company that is not only tackling a problem of enormous scale and urgency, but also represents our desire to level up employee wellness across the business world.