Axios Pro Exclusive Content

Exclusive: Alaffia scores $10M for claim operations

Apr 24, 2024
Illustration of a red pen held by a robot hand marking up a medical bill.

Illustration: Gabriella Turrisi/Axios

Alaffia, a health plan claim operations software and tech company, raised a $10m Series A, CEO TJ Ademiluyi tells Axios exclusively.

Why it matters: The U.S. health care system loses up to $935 million a week because of medical billing errors.

How it works: NYC-based Alaffia's software seeks to detect billing and code errors and fraud in medical billing.

  • The software reviews claims using a combination of in house LLM and foundational models like GPT4.
  • "That is how the majority of health care data looks like and to generate value, we digitize, normalize and then process that data," Ademiluyi says.
  • The current customer base consists of health plans, third-party administrators, and health care enterprise customers.

Zoom in: FirstMark Capital led the round with participation from GingerBread Capital and existing investors including Anthemis, Aperture Venture Capital, 1984 Ventures, Remarkable Ventures and Tau Ventures.

  • The funds will be used for customer expansion, building out tools across other use cases, business development and expanding the stack and engineering team.

What's next: "We have seen rampant growth, increasing revenue 4x over the last 12 months," he says.

  • Ademiluyi said the company is generating seven figures in revenue, and added "we are focused on top line growth and have a clear path to being profitable."

👦👧 1 fun thing: Ademiluyi is a co-founder along with his sister, Adun Akanni.

State of play: Lots of funding has gone into the medical billing and coding space, including a big Series F.

  • ClarisHealth got $57.5 million of growth funding in January.
  • Rialtic raised $37 million of Series B funding in January.
  • Codoxo raised $22 million of venture funding through a combination of debt and equity in May 2022.
  • Collective Health netted a hefty $280M series F back in 2021.
Go deeper