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Daffodil Health, an startup using AI to navigate health insurance claims, raised a $16.3 million Series A round, CEO Navin Nagiah tells Axios Pro exclusively.

Why it matters: While AI use among health insurance companies has faced scrutiny, the tech has potential to improve lengthy admin processes.

Follow the money: Flare Capital Partners led, with participation from LRVHealth, Maverick Ventures and individual investors.

San Jose, California-based Daffodil has raised $20.9 million total.

How it works: The company sells insurance companies AI tools that help payers navigate out-of-network claims and payment integrity.

The company's tools also allow payors and third-party administrators to adjust pricing in real-time.

State of play: The company is entering a competitive space that already contains Zelis and MultiPlan which re-branded to Claritev last year.

What they're saying: Flare has invested in several provider-focused startups, but has been looking to make more investments in payor-focused tech, says Flare Capital's Parth Desai. 

"There's a lot of unique challenges and complexities that I think got us excited about Daffodil, but that have historically been barriers for most solutions that we've seen selling into this market."

What's next: Daffodil is looking to raise again in around two years, but it could be sooner, Nagiah says.

The company also aims to build a platform to help customers adjust benefit and plan design more easily.

Exclusive: Daffodil Health nabs $16.3M for health claims AI

AI use among health insurance companies has faced scrutiny.

Illustration of a stack of papers with a health cross cut out from the center. 

Daffodil Health, an startup using AI to navigate health insurance claims, raised a $16.3 million Series A round, CEO Navin Nagiah tells Axios Pro exclusively.Why it matters: While AI use among health insurance companies has faced <a class="gtmContentClick" data-vars-link-text="scrutiny" data-vars-click-url="https://www.axios.com/2023/07/25/ai-lawsuits-health-cigna-algorithm-payment-denial" data-vars-content-id="4aabedc9-0530-4ab6-98e9-d3b1698f0ce1" data-vars-headline="Exclusive: Daffodil Health nabs $16.3M for health claims AI" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/07/25/ai-lawsuits-health-cigna-algorithm-payment-denial" target="_self">scrutiny</a>, the tech has potential to improve lengthy admin processes.

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Exclusive: Daffodil Health nabs $16.3M for health claims AI

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