Alaffia Health Raises $55M to Tackle Healthcare’s $570 Billion Waste Problem

Business Wire

Funding round led by Transformation Capital to accelerate AI adoption across health plan operations

NEW YORK--(BUSINESS WIRE)--
Alaffia Health, the leader in agentic AI for health plan claims operations, today announced a $55 million Series B financing, led by Transformation Capital, with participation from insiders including FirstMark Capital, Tau Ventures, and Twine Ventures. The round brings Alaffia’s total funding to more than $73 million.

As health plans face rising medical costs, increased regulatory scrutiny, and up to $570 billion in estimated annual administrative waste, demand is growing for AI that can deliver savings without introducing compliance or provider-relations risk. Founded in 2020 by sibling duo TJ Ademiluyi and Adun Akanni, Alaffia was built to address these challenges, drawing on firsthand experience growing a family business focused on revenue cycle management.

Driving Compelling Savings and Operational Efficiency for Health Plans

Today, Alaffia partners with leading regional and national health plans to help them scale clinical review capacity and unlock significant savings. Alaffia has delivered millions of dollars in medical cost savings, reduced turnaround times from weeks to days, and improved consistency across findings.

By pairing expert clinicians with AI that forensically evaluates claims against the complete patient medical record, Alaffia enables faster, more accurate, and more defensible outcomes across the entire claims lifecycle. Its solutions have delivered 20%+ average savings on high-cost facility claims and 5x+ ROI for leading health plans.

“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.”

How will Alaffia use this funding?

Alaffia will use the new capital to accelerate growth across three core areas:

Research and development: advancing best-in-class AI, engineering, and product development
Innovation: launching new AI agents across additional modalities to expand platform capabilities
Growth: scaling AI adoption to meet rising demand across the healthcare ecosystem

The company also plans to expand hiring across engineering, product, and growth teams to support its next phase of growth. As part of the financing, Todd Cozzens, Managing Partner at Transformation Capital, has joined Alaffia’s Board of Directors.

“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 Todd Cozzens, Managing Partner at Transformation Capital. “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.”

Unlike legacy payment integrity vendors and emerging AI-only solutions, Alaffia’s platform is designed specifically for real-world payer environments, where traceability, configurability, and clinical oversight are essential. With 97%+ accurate clinical fact extraction and flexible software-as-a-service and managed services delivery, Alaffia brings confidence and consistency to healthcare’s most complex workflows.

“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 at Alaffia. “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.”

To learn more about Alaffia, please visit alaffiahealth.com.

About Alaffia Health

Alaffia is a new kind of operations partner for health plans. Using expert clinicians and transparent AI, we deliver deeper insights, smarter automation, and consistently better outcomes across the entire claims lifecycle. Our solutions support workflows across Payment Integrity, Utilization Management, and Appeals, giving teams the clinical context and operational intelligence they need to work faster and with greater accuracy.

Founded in 2020, Alaffia has saved health plans $100 million and counting in medical costs. Visit www.alaffiahealth.com to learn more.

About Transformation Capital

Transformation Capital is a digital health growth equity firm dedicated to supporting commercial stage companies focused on improving people’s health and the sustainability of the healthcare system. The firm was founded on the premise that investing in healthcare requires both a sophisticated understanding of the healthcare system, including the prevailing market forces and resulting opportunities, as well as deep connections with decision makers across key providers, payers and digital health innovators. Transformation Capital has invested in digital health companies across the ecosystem, including Sword, Capital Rx, Datavant, Grow Therapy, SmarterDx, RadAI, CodaMetrix, Parachute and Local Infusion.

About FirstMark Capital

FirstMark is an early-stage venture capital firm based in New York City. Our mission is to partner with entrepreneurs who are focused on solving meaningful problems. We have built an engaged community among the teams in our network to spread ideas and opportunities. We are privileged to work alongside the founders of businesses like Pinterest, Shopify, Airbnb, Discord, Ro, Justworks, and Gravie. Visit us in New York City or online at www.firstmark.com and @FirstMarkCap on Twitter/X.