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Exclusive: YC-backed Taxo just raised $5m to slash healthcare admin with an AI “reasoning engine”

Mar 28, 2025 - techcrunch.com
British doctor Ahmed Kerwan, shocked by the administrative burden in healthcare, founded Taxo, a startup aimed at reducing this complexity through AI. Taxo's app assists with tasks like prior authorizations, patient intake, and medical billing, featuring a unique AI "reasoning engine" that transparently explains its decision-making process. This engine, built on top of models like OpenAI's and Anthropic's, is trained on exclusive healthcare data, enhancing trust and efficiency by reducing hallucinations and increasing authorization approval rates to 98%. Taxo recently secured a $5 million seed round led by Y Combinator and others, and has achieved $1 million ARR within six months of its launch.

The reasoning trend in AI, popularized by Chinese startup DeepSeek, is still in its early stages but shows promise for broader adoption. Taxo's success indicates potential for this technique beyond foundational AI companies. The startup, based in San Francisco, serves around 15 clients, including clinics and government providers. Kerwan hopes Taxo's transparent AI will address doctors' concerns about AI recommendations, a sentiment that arose with the release of ChatGPT. Charles Rollet, a senior reporter at TechCrunch, covered this story, highlighting his background in investigative reporting and his focus on the tech industry.

Key takeaways:

  • Ahmed Kerwan, a British doctor turned entrepreneur, founded Taxo to reduce administrative burdens in healthcare using AI.
  • Taxo's AI "reasoning engine" transparently explains its decision-making process, aiming to build trust with doctors and improve prior authorization approval rates.
  • The startup recently secured a $5 million seed round led by Y Combinator, General Catalyst, and Character Capital, and achieved $1 million ARR within six months of launch.
  • Taxo differentiates itself by training its AI on hard-to-access healthcare data and adding a healthcare-specific layer to existing models like OpenAI's and Anthropic's.
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