Venture capital funding for artificial intelligence-powered revenue cycle management startups is surging, with Candid Health picking up $120 million in a series D round.
Sixth Street Growth, the growth investing platform of Sixth Street, led the round with participation from Oak HC/FT, 8VC and Y Combinator. The series D fundraising round tripled Candid’s valuation over its series C fundraise in February 2025, according to the company. Candid reports 190% year-over-year annual contracted run-rate revenue growth and 180% year-over-year net dollar retention in 2025.
Candid Health provides an AI-powered RCM platform for healthcare providers, focused on automating medical billing and claims processing. It aims to use AI and automation to remove inefficiency and waste from the $280 billion spent annually on healthcare RCM processes.
Company co-founders Nick Perry and Doug Proctor worked together at software giant Palantir for five years on the leading edge of data engineering and automation.
The company, founded in 2019, built an AI-first revenue cycle management platform that unifies clinical, billing and provider data into a single model. A configurable rules engine and AI agents handle the work that billing teams used to do manually. Every remaining manual touch is tracked, so teams can continuously find and eliminate repetitive tasks, according to the company.
The company says its RCM platform, which leverages advanced automation to decrease the cost to collect and increase net collection rates, is now used by more than 200 healthcare organizations.
Candid’s customers also include digital health startups, large, national management services organizations and electronic medical record companies. Candid says it processes about $7 billion in claim volume each year.
Healthcare provider groups have grown increasingly larger, and there are more insurance companies with more rules on how to submit claims, Candid executives noted. This adds up to painful administrative challenges and costs.
Incumbent billing software can’t keep up with the complexity, Perry, who serves as Candid’s CEO, wrote in a blog post announcing the fundraise. The legacy RCM software vendors most people use were built more than 20 years ago, at a time when billers manually processed claims. Those systems still work fundamentally the same way: human teams fix claims one at a time, and innovation means fancier ways to sort the work queues, according to Perry.
The legacy players in the RCM market haven’t kept pace with innovation, and the companies “lightly sprinkling AI on top of them have yet to deliver,” he asserted.
Candid Health is automating RCM “from the ground up,” he wrote.
“We view RCM as fundamentally a data engineering problem, and like many problems we solved at Palantir, if you solve the underlying data engineering part well, you are able to automate the end-to-end workflow to an unprecedented extent. Our platforms entirely replace, or sit on top of, legacy RCM software, and automate medical billing processes that continue to be predominantly manual,” Perry wrote.
Candid designed its automation platform to submit claims correctly the first time, with no manual intervention, company executives said. The company focused on three key pillars: data integration, automation orchestration and reporting and visibility. Candid rebuilt the data model layer to incorporate critical but often disconnected information, like contracts, credentialing, service facilities and fee schedules, according to Perry.
The company deploys several forms of automation, including AI agents, deterministic rules and machine learning models, all coexisting in the same platform. In addition, Candid says it is constantly reverse-engineering new payer rules and deploying them to its customers to help them stay on top of nascent rule changes and updates.
Customers have been able to streamline RCM through the company’s platform, Candid claims. Talkiatry, a virtual psychiatry practice, reduced manual billing work by 40% while increasing claim volume, achieving a 98.3% payer net collection rate with an initial denial rate of just 3.3%, according to Candid. Nourish, a telehealth nutrition platform, replaced manual claim reviews with Candid’s rules engine and now has a 96.7% touchless claim rate.
“We see a future where no billing team member touches a claim unless the work is strategic. No fixing credentialing errors. No chasing missing modifiers. Candid handles it all. Human judgment goes where it matters: complex cases, payer negotiations, financial strategy,” Perry wrote in the blog post.
Alex Katz, managing director at Sixth Street Growth, said the Candid team has built a “modern infrastructure to enable an agentic transformation of the healthcare revenue cycle.”
“In addition to a differentiated technology offering and clear proof points applying agentic AI at scale in RCM, the thing that stood out to us was Candid’s obsessive focus on customer outcomes. We spoke with nearly 40 Candid customers. The feedback was consistently ‘off the charts’ and really emphasized how Candid’s platform had transformed underlying practice operations,” Katz said.
The RCM tech space is experiencing a funding boom, propelled by advances in AI and automation. Commure banked $70 million to scale its autonomous RCM platform in May, AI-powered payer intelligence company Anomaly Insights secured $17 million, Amperos Health raised $16 million in series A funding in April and Adonis, an AI orchestration platform for RCM, collected $40 million in March.
Revenue cycle management also is an active sector for consolidation. So far in 2026, IKS Health purchased TruBridge to extend its RCM platform to rural communities, Med-Metrix completed back-to-back deals for Vitalware and CanAide, and Innovaccer folded CaduceusHealth into its platform.
Private equity players also placed their bets. Matt Holt’s Thoreau Group signed a $12 billion agreement to acquire RCM player Ensemble Health.