Avalon Healthcare Solutions announced it has secured a new majority investment from WindRose Health Investors, a transaction the company plans to use to accelerate product development and broaden its reach across the payer ecosystem. Existing backer Francisco Partners will continue to support the business through a reinvestment, positioning the company for the next phase of growth in diagnostic intelligence. Financial terms were not disclosed.
Avalon said the deal is intended to strengthen its foundation for future innovation while maintaining continuity for customers and partners.
Avalon works with more than 30 national, regional, and community health plans and supports more than 90 million members, according to the company. Its proprietary Diagnostic Insights Platform underpins its benefit management and analytics offerings, and Avalon said its patented, real-time, automated policy enforcement engine processes more than 18 million claims each month to help ensure that diagnostic testing decisions align with evidence-based policies and cost-effective care.
The company is framing the investment as a push to capitalize on the expanding role of diagnostics in healthcare decision-making. Avalon cited industry estimates that diagnostic information informs the majority of medical decisions, arguing that diagnostic data remains underused as a clinical and financial asset despite its importance across the care continuum.
Avalon said it will use the new capital to expand its diagnostic intelligence capabilities, accelerate development in predictive analytics and automated policy enforcement, and further strengthen its platform. The company also said it plans to scale into new channels, including third-party administrators and brokers serving self-funded employers beginning in 2026.
Avalon emphasized that the ownership change will not alter day-to-day operations. The company said there will be no changes to service delivery, SLAs, client teams, pricing, or provider relations as a result of the transaction.
WindRose characterized Avalon as a central player in the ongoing shift toward more data-driven, value-based approaches to diagnostics, citing the company’s platform and clinical rigor. Francisco Partners said its decision to reinvest reflects continued conviction in Avalon’s leadership and the role diagnostic intelligence can play in improving outcomes while reducing unnecessary spend.
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“Avalon is entering an exciting new chapter. This investment amplifies the momentum we’ve built and enables us to accelerate the innovation our clients count on — from diagnostic policy automation to advanced analytics that transform outcomes across the entire test-to-treatment journey.”
Bill Kerr, MD, CEO, Avalon Healthcare Solutions
“Avalon stands at the heart of the diagnostics transformation. Their platform, clinical scientific rigor, and measurable impact make them uniquely positioned to deliver value across the healthcare ecosystem. We are thrilled to support Avalon in its next phase of scale.”
David Pontius, Partner, WindRose Health Investors
“Our reinvestment reflects our strong conviction in Avalon’s mission, leadership, and performance. Avalon has demonstrated that diagnostic intelligence is essential to driving value-based care, and we look forward to supporting the journey ahead.”
Ezra Pearlman, Partner, Francisco Partners
