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Exclusive: Daffodil Health seeds $4.6M for pricing and admin solutions

Illustration of a robotic hand holding a glowing dollar sign.

Illustration: Allie Carl/Axios

Daffodil Health, which uses AI to automate health care pricing, raised a $4.6 million seed, CEO Navin Nagiah tells Axios exclusively.

Why it matters: The U.S. spends up to $1 trillion on health administrative work, representing as much as 25% of total national health care spending.

Zoom in: Maverick Ventures led the round and Epic Ventures joined.

How it works: Founded in 2023, San Jose-based Daffodil this year launched its first application, an LLM-based software-as-a-service repricer.

  • The application is designed to automate out-of-network and reference-based pricing processes.
  • Features include real-time repricing of claims based on the preferred pricing methodology of payers or third-party administrators (TPAs), organizations that process the claims and reporting components of self-funded benefits plans.

The latest: "We expect to go live with our first set of customers in a couple of months," he says.

What's next: Nagiah expects to raise again in 2026.

  • The company is not profitable or generating revenue but is "making great progress towards the latter," he says.

State of play: Data analytics firm MultiPlan, which helps insurers detect health claim overcharges and negotiates new reimbursement, recently came under fire for the financial incentives it used that left patients and providers with large bills.

  • UnitedHealth reaped $1 billion in fees from out-of-network savings programs, including MultiPlan, the New York Times reported last month.

What they're saying: "Pricing data is increasingly becoming more transparent as CMS requires both payers and providers to disclose pricing data," says Maverick Ventures managing director Prateesh Maheshwari.

  • "The increasing trend towards transparency will remove the opacity that has driven inefficiency in this market," he adds.
  • "We consider the market need to be de-risked, as payers already subscribe to services to help them price services — the core question is, are they getting a fair deal?"

🌼 Fun fact: Daffodils are associated with the arrival of spring and considered symbols of renewal and new beginnings — or what the company hopes to bring to claims data.

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