Alaffia Health raises $55M Series B to cut health plan claims waste with agentic AI

Health plans are buried under rising medical costs, tighter oversight, and a claims process that quietly burns through hundreds of billions of dollars each year. A growing number are betting that AI can help—if it doesn’t create new risk in the process.

That’s the opening Alaffia Health is leaning into after raising a $55 million Series B round led by Transformation Capital, with participation from existing investors FirstMark Capital, Tau Ventures, and Twine Ventures. The new financing brings the company’s total funding to more than $73 million.

Founded in 2020 by siblings TJ Ademiluyi and Adun Akanni, Alaffia Health was shaped by firsthand exposure to healthcare billing through a family business focused on revenue cycle management. That background led the founders to focus on one of the system’s most expensive friction points: claims operations that move slowly, vary widely, and struggle to withstand audits or provider pushback.

Health plans face as much as $570 billion in administrative waste each year, according to industry estimates, much of it tied to manual review processes and inconsistent clinical interpretation. Alaffia’s pitch centers on pairing licensed clinicians with AI agents that evaluate claims against the full patient medical record, producing results that are faster and easier to defend.

The company says its platform has already delivered millions of dollars in medical cost savings for regional and national health plans. Turnaround times that once stretched into weeks now land in days, with more consistent outcomes across reviews. On high-cost facility claims, Alaffia reports average savings of more than 20 percent and a fivefold return for customers.

“Health plans are under immense pressure to reduce administrative costs and drive affordability for their members, and like many industries, they’re starting to see the value of emerging AI solutions,” said TJ Ademiluyi, co-founder and CEO of Alaffia. “With this funding, we’re expanding our team and platform so we can continue solving some of the most expensive operational challenges in healthcare and ultimately reduce the burden on the system as a whole.”

With $55M in Funding, HealthTech Startup Alaffia Health Aims to Tackle Healthcare’s $570B Waste Problem

The new capital will support deeper investment in research and product development, as well as in new AI agents that extend the platform into more clinical use cases. Alaffia also plans to grow its engineering, product, and growth teams as demand increases across the payer market. As part of the deal, Todd Cozzens, managing partner at Transformation Capital, has joined the company’s board.

“Payment integrity is one of the most untapped opportunities in healthcare, in part because payers are harder to build for due to their complex and diverse rule sets,” said Cozzens. “Alaffia has built a core clinical review platform that is already delivering millions in savings and can scale beyond payment integrity to become foundational infrastructure for health plans. By reducing administrative waste and improving accuracy across claims operations, Alaffia ultimately helps lower costs for health plans — creating a more affordable healthcare system for consumers.”

Alaffia sets itself apart from legacy vendors and AI-only entrants by emphasizing traceability and clinical oversight. Its system offers configurable workflows and supports both software subscriptions and managed services, with the company reporting more than 97 percent accuracy in clinical fact extraction. That mix is designed to fit payer environments where decisions must withstand regulatory review.

“Healthcare doesn’t need more automation that no one can explain — it needs AI that clinicians, operators, and regulators can trust,” said Adun Akanni, co-founder and COO. “We founded Alaffia to bring transparency and clinical rigor to claims operations, and this funding allows us to scale that mission as we help health plans reduce waste and operate with confidence.”

Today, Alaffia supports workflows across payment integrity, utilization management, and appeals, giving health plan teams a broader clinical context across the full claims lifecycle. Since launch, the company says it has helped customers save more than $100 million in medical costs—and plans to increase that total as adoption grows.

TJ Ademiluyi and Adun Akanni, Alaffia Health Co-Founders