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YC-Backed Startup Taxo Raises $5M to Streamline Healthcare Admin

Doctors Spend More Time on Paperwork Than Patients

When British doctor Ahmed Kerwan began practicing medicine, he was shocked by the amount of administrative work. Some days, he only had three hours for patient care—while the rest was consumed by documentation, insurance processes, and billing.

Automating Tedious Healthcare Tasks with AI

Today, hundreds of startups are trying to solve this very problem using AI. Platforms like Abridge and Ambience have already stepped into the scene. But Ahmed Kerwan took a different approach by founding his own startup: Taxo.

What Does Taxo Do?

Taxo is a platform built for healthcare professionals that helps automate:

  • Prior authorizations from insurers,
  • Patient intake processes,
  • Medical billing and documentation.

AI-Powered “Reasoning Engine”

What sets Taxo apart is its proprietary AI “reasoning engine.” Unlike traditional black-box AI tools, this system explains:

  • How each decision was made,
  • Why a specific recommendation is being given.

This transparency builds trust between the technology and healthcare professionals.

Drastically Improved Approval Rates

Thanks to its AI engine, Taxo has achieved a 98% approval rate for prior authorizations—significantly higher than the industry average of around 80%.

Custom Healthcare Layer on Top of Leading Models

Taxo enhances existing models like OpenAI’s and Anthropic’s by adding a custom healthcare-focused layer. It’s trained on unique, hard-to-access medical data—making it nearly impossible for competitors to replicate overnight.

As Kerwan puts it: “We didn’t want to get steamrolled every time OpenAI releases a new model.”

$5M Seed Round and Rapid Growth

Taxo recently raised a $5 million seed round led by Y Combinator, General Catalyst, and Character Capital. In just six months, it reached $1 million in annual recurring revenue (ARR) and now serves about 15 clients, including private clinics and government healthcare providers.

Transparent AI for a Skeptical Industry

“Doctors were initially skeptical of tools like ChatGPT,” Kerwan explained, “because they couldn’t trace where recommendations were coming from.”
With Taxo, that changes:

“You can see exactly where we got the information and why it’s being presented.”

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