Daffodil Health, a San Francisco company that sells AI software for health plan administration and claims processing, raised a $16.3m Series A round, announced on 17 February 2026.
Flare Capital Partners led the round. LRVHealth and returning investor Maverick Ventures took part, as did two individuals: Scott Mingee, the former chief executive of Equian, and Jim Lacy, the former president and chief operating officer of Collective Medical. No valuation was disclosed.
Daffodil has now raised $20.9m in total, according to MedCity News and Pulse 2. The company said it will use the funds to speed up product development and expand deployments with health plans and third-party administrators.
What Daffodil does
The company's software lets payers, meaning health plans and third-party administrators, reprice out-of-network claims in-house. That work has historically been outsourced to vendors. Daffodil provides transparent benchmarks and real-time reporting, and its website says the software generates pricing rationale that plans can use in negotiations with providers.
Its pricing model is a software subscription. MedCity News contrasted this with the percentage-of-savings model used by companies such as MultiPlan and Zelis, where the vendor takes a share of what the plan saves.
Navin Nagiah is chief executive and co-founder. Pulse 2 reported that he was previously senior vice president of products at MultiPlan, now part of Claritev. The sources do not say when the company was founded.
Customers are not named. Briefglance reported that the company claims seven-figure margin improvements across its partners, and that one payer partner saved about $4m in its first year from reduced legacy vendor fees. Those figures come from the company, and the sources do not independently verify them.
The sources do not give Daffodil's founding year or headcount.
Briefglance described the platform as offering real-time claims support and automated negotiations based on defensible benchmarks, and said it moves customers from percent-of-savings fees to a predictable subscription. For a health plan, that changes the vendor's incentive: the fee no longer rises with the size of the discount the vendor negotiates.
What the money is for
Daffodil plans to scale its out-of-network repricing product and its pre-pay payment integrity tools nationally. Pre-pay payment integrity refers to checking claims before they are paid.
Nagiah said the longer-term aim is to modernise what he called the engine room of healthcare. He also said that removing low-value intermediaries from out-of-network repricing and payment integrity is the first step.
Parth Desai, a partner at Flare Capital Partners, said the AI-native automation and auditability built into Daffodil let plans arrive at faster and more defensible pricing.
Pulse 2 quoted Nagiah saying that for too long, health plans have been unable to meaningfully address the healthcare cost crisis. Desai added that Daffodil is redefining how health plans and third-party administrators modernise plan design, pricing and claims infrastructure.
The cost backdrop
MedCity News framed the raise against the cost of US healthcare. It cited figures that healthcare is about 20% of the US economy, that about 41% of Americans have medical debt, and that 58% of US debt collections are tied to medical bills.
Company website: daffodilhealth.com