The Caduceus acquisition will add nearly 200 employees to Innovaccer’s rolls and open up a new avenue for the company in revenue cycle management, cofounder Abhinav Shashank told ET. Currently, the company unifies fragmented data from legacy hospital systems into a single cloud platform. It allows healthcare providers to coordinate patient care and use AI agents to automate billing and administrative workflows.
Founded in 2014 by IIT Kharagpur alumni Shashank and Kanav Hasija, along with IIM Ahmedabad alumnus Sandeep Gupta, Innovaccer has been expanding aggressively into AI-led healthcare infrastructure and workflow automation.
Caduceus is part of a broader strategy to build autonomous healthcare systems and an “enterprise intelligence platform,” Shashank said. He added that the US spends about $5.5 trillion annually on healthcare, of which nearly 30% (roughly $1.5 trillion) goes towards administrative processes. “The administrative spend alone in the US is larger than the total healthcare spend of any other country in the world,” Shashank said, adding that AI could significantly reduce inefficiencies in these workflows.
The company said it serves over 200 health systems and payers, including 95% of community pharmacies across the United States.
The acquisition comes weeks after Tiger Global-backed Innovaccer laid off around 340 employees across its India and US teams as part of its pivot towards becoming an AI-native organisation. “It was an incredibly hard decision to make. But as AI capabilities evolve, we have to rethink what the right organisational structure should look like,” Shashank said.
According to him, functions like software engineering, data integration, finance, and operations are being redesigned around AI capabilities. Innovaccer said it currently has about 12,000 employees across functions, with more than half based in India.
AI-native healthcare stack
Innovaccer said its acquisition strategy is not aimed at scaling revenues directly, but at expanding platform capabilities. A large part of its recent growth is now coming from AI-led offerings. The cofounder said the firm launched 12 healthcare-specific small language models internally.
“We are growing around 50% on-year, with revenue cycle automation expected to become a major contributor over the next few years,” Shashank explained without revealing the revenue numbers. The company derives about 95% of its income from the US, though it has started expanding into the Middle East and Asia.
India, however, may still take time to become a large market for healthcare AI platforms due to gaps in healthcare digitisation infrastructure, he said.
“We are having conversations with some of the larger health systems in India because they do have some degree of digital infrastructure,” Shashank said. “But for the majority of healthcare institutions where a proper system-of-record layer still does not exist, widespread deployment is probably still a few years away.”
Innovaccer competes with the likes of Palantir, Epic Systems, Oracle Health, Health Catalyst, and other such companies in the US.
The company raised $275 million in January 2025 led by B Capital Group with participation from other US-based VCs — Kaiser Permanente, M12, Banner Health. The round valued the company at about $3.2 billion and took its total funding to roughly $675 million.