Daffodil Health, an AI-powered platform modernizing U.S. health plan administration and claims processing, has raised $16.3 million in a Series A round, bringing total funding to $20.9 million. The funding was led by Flare Capital Partners, with participation from LRVHealth and returning investor Maverick Ventures, plus individual investors including Scott Mingee, former CEO of Equian, which was acquired by Optum, and Jim Lacy, former president and COO of Collective Medical, which was acquired by PointClickCare.
The company said the new capital will be used to accelerate product development and expand deployments with health plans and third-party administrators seeking improved price transparency, automated negotiations, and real-time claims support. Daffodil is positioning its platform as a replacement for legacy vendors and point solutions that it says struggle to support newer plan designs, such as narrow and tiered networks, reference-based pricing, and dynamic copays, in part due to static pricing models and delayed reporting.
Daffodil is also targeting the percent-of-savings pricing model that has long defined out-of-network repricing and payment integrity services. The company said its approach brings in-house out-of-network and payment integrity functions with minimal to no increase in labor costs, while enabling payers and TPAs to adjust pricing in real time using transparent benchmarks that withstand regulatory review.
The company framed its pitch within the broader U.S. healthcare cost crisis, citing the scale of healthcare spending and the administrative burden it argues is driving costs higher. Daffodil said more than $1 trillion is spent annually on administrative processes and that administrative inefficiencies are a key driver of rising healthcare costs. Against that backdrop, Daffodil said it has consistently delivered seven-figure improvements in plan margins across current partnerships, emphasizing predictable costs and faster deployment without disrupting existing workflows. In one deployment, the company reported that a payer partner saved approximately $4 million in the first 365 days of the partnership, solely through vendor fee reductions, before accounting for additional gains from improved price configuration and reporting.
KEY QUOTES
“For too long, health plans have been unable to meaningfully address the healthcare cost crisis because they’ve been forced to pay high fees to middlemen whose incentives often make the problem worse. At Daffodil, we believe removing these low-value intermediaries from out-of-network repricing and payment integrity is the first step toward modernizing the archaic practices and systems that continue to drive up costs. By giving plans control over pricing logic and real visibility into claims, we’re striving for more transparent, auditable, and cost-effective benefit design across the board.”
Navin Nagiah, CEO And Co-Founder, Daffodil Health; Former SVP Of Products, MultiPlan/Claritev
“Daffodil is redefining how health plans and TPAs modernize plan design, pricing, and claims infrastructure while helping payors capture more margin and deliver more member-centric experiences. With AI-native automation and auditability built in, Daffodil enables faster, defensible pricing and plan design decisions, at scale, that legacy incumbents and point solutions can’t match.”
Parth Desai, Partner, Flare Capital Partners
