FraudScope (now Codoxo) Raises $7 Million in Series A Funding to Expand its AI Solutions to Address Healthcare Fraud, Waste & Abuse
Leading venture capital funds QED Investors and Brewer Lane Ventures join company’s list of prominent financiers
ATLANTA — FraudScope (now Codoxo), the fast-growing AI-based platform that helps health plans address the increasing problem of fraud, waste, and abuse, today announced it has completed a $7 million round of Series A financing. The largest participants in the round were QED Investors, Brewer Lane Ventures, and the GRA Venture Fund.
“QED is singularly focused on supporting companies that solve real-world problems and can have a broad societal impact. The rising cost of health care is a perfect example of an issue that hurts consumers, businesses, and the economy as a whole – and one that technology is uniquely positioned to help solve,” said Matt Risley, Partner at QED Investors. “We look forward to using our operational expertise to help the FraudScope team use its cutting-edge machine learning to reduce healthcare fraud, shoring up health plans and bringing down costs for consumers and employers at a time when both are under tremendous pressure.”
“Our artificial intelligence-driven innovations in fraud, waste, and abuse identification and prevention are matched only by the results we deliver to our customers,” stated Musheer Ahmed, CEO of FraudScope. “With this round of financing, we are closer to realizing our vision of becoming the AI-based collaboration platform that integrates across fraud, payment integrity, clinical and provider network teams to drive down costs and increase efficiencies for health plans.” Traditional rules-based techniques to address healthcare fraud, waste and abuse are reactive and cannot identify new and emerging schemes in a timely manner leading to significant financial losses at health plans. FraudScope’s solutions are designed to proactively monitor and identify new schemes as soon as they emerge which helps maximize savings.
The additional capital will be used to scale the team and expand product offerings to meet the growing needs and opportunities at health plans. "Fraudscope is a leader in AI driven health fraud detection," said John Kim, Founder and Managing Partner of Brewer Lane Ventures. "We are delighted to leverage our operating experience in the insurance industry to assist the company with its strategy and marketing efforts." This Series A Round brings FraudScope’s total funding to $10.5 million. Existing investors that also participated in the round include Spider Capital, Mosley Ventures, and TechSquare Labs.
The National Health Care Anti-Fraud Association and other government and law enforcement groups place the cost of healthcare fraud at 3 percent to 10 percent of the total healthcare costs in the U.S., or as much as $300 billion. FraudScope provides health plans with advanced identification and workflow tools to detect and investigate emerging fraud, waste, and abuse schemes, and prioritize claims to greatly reduce their financial risk. These capabilities become extremely valuable to health plans, especially during the COVID-19 pandemic due to the increase in new fraud, waste, and abuse.
This announcement follows a host of other news coming from FraudScope in recent months. In the first quarter, FraudScope announced its AI platform had helped health plan customers realize tens of millions of dollars in fraud, waste, and abuse identifications and savings. FraudScope also recently announced that it achieved Certified status for information security by HITRUST®, and the company rolled out a series of upgrades and enhancements for its proprietary case management and reporting technology.
“As an early investor, the GRA Venture Fund is pleased to see the continued growth of FraudScope’s technology and customer satisfaction,” said Kurt Jacobus Managing Director of the GRA Venture Fund. “Fraud, waste, and abuse are affecting the whole healthcare system, and we believe that FraudScope’s AI is a strong market differentiator. ” Information about FraudScope’s AI platform and claims investigation solutions can be found at https://www.fraudscope.com/solutions/.
About FraudScope (now Codoxo)
FraudScope is an AI-based platform that accelerates the identification of fraud, waste, and abuse. Our comprehensive claims investigation platform utilizes proven and patented AI-based technology to empower investigators and analysts to derive insights and conduct full investigations of suspect claims. More on FraudScope >
About QED Investors
QED Investors is a leading boutique venture capital firm based in Alexandria, VA. We are focused on investing in early stage, disruptive financial services companies in the U.S., U.K. and Latin America. QED is dedicated to building amazing businesses and uses a unique, hands-on approach that leverages our partners’ decades of entrepreneurial and operational experience, helping their companies achieve surefooted growth. Notable investments include Creditas, Credit Karma, ClearScore, GreenSky, Klarna, Konfio, Mission Lane, Nubank, QuintoAndar, Remitly, SoFi, and Wagestream.
About Brewer Lane Ventures
Brewer Lane Ventures is an early stage venture firm focused on insurtech and fintech companies. Using our deep knowledge of the insurance and financial services industries, we invest in startups that will transform the market for companies and consumers alike. We bring together domain expertise from founding and scaling startups, venture investing, and running Fortune 100 companies. Brewer Lane’s partners have significant operating and board experience in leading financial services companies like New York Life, CIGNA, Aetna, SoFi and FiServ. To learn more, visit us at brewerlane.com or @BrewerLaneVC.
About GRA Venture Fund
GRA Venture Fund is a public-private venture capital fund investing in research-driven, Georgia-based startup companies. The Fund makes seed, early-stage and mid-stage investments in companies. Fund investors are the State of Georgia, private individuals, corporations and foundations.