Avallon has raised $4.6 million in seed funding to scale its AI agent technology that automates insurance claims operations. The round was led by Frontline Ventures, with participation from Y Combinator, 1984, Liquid2, and Booom. The company plans to use the capital to expand hiring and further develop its platform, moving beyond current applications in Workers Compensation and Automotive claims to offer a comprehensive AI system designed for all Property and Casualty lines and healthcare.
The insurance industry continues to face a significant workforce gap, with the U.S. Bureau of Labor Statistics projecting nearly 400,000 workers leaving the sector by 2026. Avallon aims to alleviate staffing pressures by automating core administrative work across the claims lifecycle. Its multimodal AI platform creates structured claims data and integrates with widely used CMS platforms, IVR systems, and data warehouses. The company’s voice and workflow agents manage intake tasks, respond to billing and status inquiries across email, phone, or file upload channels, communicate with employers, medical providers, repair shops, and injured workers, extract and summarize data from documents, including medical reports and invoices, and analyze policy terms to identify potential exposures.
Founded earlier this year, the company has experienced rapid commercial growth, with a significant increase in revenue during its participation in Y Combinator’s Spring 2025 cohort. Avallon has since expanded annual recurring revenue through contracts with Third-Party Administrators and carriers in the U.S. and Europe, including Athens Administrators, a California-based TPA.
The founding team includes Cornelius Schramm, Bryan Guin, Moritz Bartusch, and Leander Peter. Their backgrounds span roles at Cornell, MIT, FINN, EY, and Taktile, bringing together expertise in machine learning systems, insurance and claims workflows, and enterprise automation.
With the new funding, Will Prendergast, Partner at Frontline Ventures, will join as a Board Observer. Avallon is headquartered in New York and is currently hiring software and systems engineers.
KEY QUOTES:
“The convergence of staffing challenges and advanced LLMs creates a unique opportunity for AI-native automation in insurance claims management. Our founding team plodded through automotive claims manually for years and knew there had to be a better way. We’ve built our AI agents for the new economy: a platform that tackles repetitive manual tasks to enable insurance professionals to focus on higher-value work.”
Cornelius Schramm, Co-Founder and CEO, Avallon
“Working with the Avallon team has been excellent. They clearly care about delivering solutions that meet our business needs while ensuring our customers’ experience is exceptional. The team is both professional and personable, and they aren’t afraid to suggest alternative approaches when they see a better path forward. It truly feels like we’re in this together, with their success tied to ours. Their intuitive platform and their responsiveness have made it easy to integrate AI into our claims operations quickly and effectively.”
Danny Smith, VP of IT, Athens Administrators
“Rising claims volumes, increasing fraud risk, and talent shortages have made insurance one of the most compelling sectors for AI-native transformation. By using Voice AI to understand claim-specific context, and embedding itself within existing workflows, Avallon will drive significant profitability gains for forward-thinking TPAs.”
Will Prendergast, Partner, Frontline Ventures
