Stedi, the firm remaking the failing technical infrastructure of America’s healthcare system, announced today that it has closed a $50 million Series C round. Led by Addition, the Series C fundraise signifies competitors trying to replace healthcare clearinghouses with modern API-first infrastructure. The round included fintech and software bigwigs like Stripe, USV, Ribbit Capital, First Round, BoxGroup, Bloomberg Beta, and prominent angels.
The Crisis of Legacy EDI
For decades, electronic data interchange (EDI), or the transfer of medical information using pre-Internet infrastructure, has co-existed with today’s modern internet. These older legacy systems often still depend on manual portals, batch cycles, and “offshored” support teams who are unable to fix long transaction errors.
Source: Stedi
Today, with claim denials rising to almost 12% in 2024, ageing systems have evolved into multi-billion-dollar liabilities for the healthcare industry.
“The core design of legacy clearinghouses is incompatible with an ecosystem being modernized by AI,” said Stedi founder and CEO Zack Kanect. “Reliable transaction processing must be programmable. We’re building a clearinghouse system that isn’t just a portal but a developer platform that feels like a utility.”
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Scaling to One Billion Transactions
Stedi’s growth indicates there’s demand for something different in the market. The startup’s paid customer base increased 6-fold and transaction volume 7-fold year over year. Stedi now facilitates over a billion transactions annually, linking providers to a network of 3,400 plus US payers.
The key selling point of the platform is its “JSON-native” architecture. Unlike established EDI standards, which are notoriously difficult for contemporary software to process, Stedi translates the labyrinthine world of medical codes into clean, developer-friendly data. This feature enables health tech firms to implement insurance eligibility verification and claims billing in just a few lines of code.
Powering the AI Revenue Cycle
The Series C investment comes as the Revenue Cycle Management (RCM) space is in the middle of an enormous AI overhaul, which relies on AI agents having access to extremely fast, real-time data. And these speeds are well beyond what legacy billing systems can handle.
Stedi has leapfrogged even these nascent efforts by unveiling Stedi Agent, which aims to run AI applications inside its clearinghouse. 99.9% uptime and instant API response times will make Stedi the must-have engine for the 2.0 wave of AI-based medical billing startups.
With another $50 million in equity, which capitalizes Stedi’s pre-Series A total funding of $142 million, the company is planning to aggressively grow its engineering and product teams so it can finally do away with “connectivity” altogether. Step one is to automate transactions; step two is one-click payer integrations.
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