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Daffodil Health, a company focused on automating health plan administration and claims processing, has raised $16.3 million in Series A funding, bringing its total raise to $20.9 million.
Flare Capital Partners led the round, with participation from LRVHealth and existing investor Maverick Ventures.
Individual investors Scott Mingee, former CEO of Equian (acquired by Optum), and Jim Lacy, former president and COO of Collective Medical (acquired by PointClickCare), also participated in the round.
WHAT IT DOES
The San Francisco-based company uses AI and large language models (LLMs) to automate healthcare pricing and administration, focusing on reducing administrative costs. The company says it can help develop employer and code-specific pricing rules, configure employer and provider reports, and generate pricing rationale.
Daffodil will use the Series A funds to enhance its product and expand its partnerships with health plans and third-party administrators.
"For most employers, healthcare premiums are already the second or third largest line item on the P&L, and they continue to rise faster than wages or revenue. A significant driver of that cost sits upstream with payers, in the form of low-value out-of-network repricing and payment integrity middlemen whose incentives are fundamentally misaligned," Navin Nagiah, cofounder and CEO of Daffodil, told MobiHealthNews.
"Daffodil automates OON and payment integrity end-to-end with an AI-first platform, giving innovative payers control over pricing and transparency - and allowing savings to flow back to employers, where they belong."
MARKET SNAPSHOT
In 2024, Daffodil garnered $4.6 million in seed funding in a round led by Maverick Ventures, with participation from Epic Ventures.
Other companies offering claims automation include Change Healthcare, owned by UnitedHealth Group, and Experian Health.
