Candid Health raises $120 million for AI medical billing platform
The Series D led by Sixth Street Growth comes as Candid says revenue is rising quickly and demand grows for automated claims processing.
By Hana Yoshida · Markets Reporter
3 min read
Candid Health has raised $120 million in Series D funding to expand its medical billing automation business, Fortune reported. The round gives the company more capital to sell into a costly part of U.S. healthcare: the process providers use to submit claims and get paid.
Sixth Street Growth led the financing, according to Fortune. Existing investors Oak HC/FT, 8VC and Y Combinator also participated.
Fortune reported that the new round triples Candid’s 2025 valuation. The company’s annual recurring revenue rose 190% from a year earlier, and its total funding now exceeds $219 million, according to the report.
Billing software aimed at payer rules
Candid handles billing operations for healthcare providers. Fortune reported that the company uses AI agents and a rules engine built around the submission requirements of more than 1,000 payers, with the goal of reducing rejected claims and manual corrections.
The company is targeting a system in which insurers use different claim requirements and many providers still depend on older billing software, according to Fortune. When a claim contains an error, such as the wrong code, it can be denied or sent back, leaving providers and patients to address the cost or paperwork.
Candid’s cofounders, CEO Nick Perry and Doug Proctor, met at Palantir, Fortune reported. Perry worked on healthcare projects there, while Proctor worked on defense and intelligence systems. They view revenue cycle management as a data integration problem similar to the work Palantir was built to address, according to the report.
Fast growth with little marketing
Perry told Fortune that Candid’s growth has come largely through customer referrals and that the company had spent almost nothing on marketing before now. He said the business grew 6 times, then 5 times, then 2.5 times on a run-rate basis in recent years.
Perry also told Fortune that net revenue retention is close to 200%, meaning existing customers have tended to expand spending as their own claims volumes grow. The company did not disclose annual recurring revenue in the report.
The latest funding follows a $52.5 million Series C about 18 months earlier, Fortune reported. That round came after a $29 million Series B six months before it.
A large administrative target
Healthcare billing administration costs about $280 billion annually in the United States, Fortune reported, citing industry coverage of the sector. The report also cited federal data showing overall U.S. healthcare spending at about 18% of gross domestic product, with medical billing representing roughly 1% of GDP.
Sixth Street’s Alex Katz told Fortune that the firm spoke with nearly 40 Candid customers before investing and received consistently strong feedback. Fortune cited customer results including Talkiatry reducing manual billing work by 40% and collecting 98.3% of amounts owed by payers, while Nourish automatically processes 96.7% of its claims without adding billing staff as it grew.
Proctor told Fortune that Candid wants to shrink the amount of labor required in billing, including manual and offshore work used by older vendors. Perry said he is not focused on taking the company public, pointing to Stripe as an example of a large private company, according to Fortune.
This story draws on original reporting from Fortune.