The New Funding Will Support Daffodil’s Expansion as Its Pricing and Payment Integrity Solution Delivers Seven-Figure Improvements for Payor Partners
SAN FRANCISCO–(BUSINESS WIRE)–Daffodil Health, an AI-powered platform modernizing U.S. health plan administration and claims processing, today announced it has raised $16.3 million, bringing its total funds raised to $20.9M. The series A funding was led by Flare Capital Partners, with participation from LRVHealth and returning investor, Maverick Ventures, alongside key individual investors, including Scott Mingee, former CEO of Equian (acquired by Optum), and Jim Lacy, former president and COO of Collective Medical (acquired by PointClickCare).
The $16.3 million in fresh capital will enable Daffodil to accelerate its product development and expand deployments with health plans and third-party administrators (TPAs) seeking improved price transparency, automated negotiations, and real-time claims support, further displacing legacy vendors. This comes as employers push payors to rein in healthcare costs while delivering more transparency and auditability.
Built around static pricing models and delayed, limited reporting frameworks, legacy claims systems and point solution vendors can’t support the flexible plan designs now gaining traction, such as narrow and tiered networks, reference-based pricing, and dynamic copays. Daffodil addresses this gap by modernizing the claims layer that underpins next-generation, cost-efficient health plans, with a straightforward pricing model that aligns incentives and keeps costs predictable.
These market forces highlight a broader cost crisis across the U.S. healthcare system. Today, healthcare accounts for nearly 20% of the U.S. economy. Unfortunately, the burden of this spending most commonly falls on patients, with 41% of Americans carrying medical debt, 46% of adults skipping necessary care due to cost, and 58% of all U.S. debt collections are tied to medical bills. Daffodil Health has identified administrative inefficiencies as a key driver of the rising cost of healthcare, with more than $1 trillion spent annually on administrative processes.
As an AI-first alternative designed to eliminate this administrative waste, Daffodil enables payers to bring out-of-network (OON) and payment integrity in-house with minimal to no increase in labor costs. The system also allows payors and TPAs to adjust pricing in real-time using transparent benchmarks that withstand regulatory review.
“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,” said Navin Nagiah, CEO and co-founder of Daffodil Health, and former SVP of Products at MultiPlan/Claritev. “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.”
Across its current partnerships, Daffodil has consistently delivered seven-figure improvements in plan margins. Unlike legacy vendors that rely on percentage-of-savings pricing models, Daffodil operates on an AI-centric SaaS approach that enables faster deployment and predictable costs without disrupting existing workflows. In one deployment, a payor partner saved approximately $4M in the first 365 days of the partnership, solely through vendor fee reductions, before accounting for downstream gains from improved price configuration and reporting.
“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,” said Parth Desai, Partner at Flare Capital Partners. “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.”
For more information on Daffodil Health and how they are transforming the medical claims process, please visit daffodilhealth.com.
About Daffodil Health:
Daffodil Health is an AI-first healthcare technology company modernizing the claims and pricing infrastructure used by U.S. health plans. Its configurable, transparent platform enables payors and third-party administrators (TPAs) to bring out-of-network (OON) repricing and payment integrity in-house—without added operational complexity or labor costs.
Daffodil replaces opaque, percentage-of-savings middlemen with a modern SaaS model that gives plans direct control over pricing logic, real-time reporting, and defensible benchmarks that withstand regulatory and audit scrutiny. Built to work alongside existing core claims systems, the platform supports next-generation plan designs such as reference-based pricing, narrow and tiered networks, and dynamic copays.
Across its customers, Daffodil has delivered consistent seven-figure improvements in plan margins by reducing administrative waste and aligning incentives. Headquartered in San Francisco, the company’s mission is to help health plans lower costs, improve auditability, and enable more sustainable, member-centric benefit designs.
About Flare Capital Partners
Flare Capital Partners is the leading healthcare technology venture capital firm advancing innovation-driven companies to improve positive health outcomes, broaden care access, and lower healthcare costs. We partner with exceptional founders solving healthcare’s hardest challenges, supporting each with our deep sector expertise, unparalleled industry resources, and proven access to commercial opportunities. Our team of established investors and senior operating executives has invested in 70+ companies and has nearly $1 billion in assets under management. Learn more at www.flarecapital.com.
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