This former Eli Lilly exec just raised a $52 million seed round from family offices to build a new healthcare AI startup

Michelle Carnahan, a former executive with Eli Lilly and president of the healthcare startup Thirty Madison, is embarking on an exciting new venture. Her latest project, Arbiter, has successfully raised $52 million in seed funding at a valuation of $400 million. Notably, this funding round did not involve traditional venture capitalists; instead, it was backed primarily by family offices, which manage the investments of wealthy families. Co-led by TriEdge Investments and MFO Ventures, along with contributions from WindRose Health Investors, Arbiter aims to transform healthcare administration. The startup's platform automates essential tasks for healthcare providers and plans, including managing referrals and scheduling appointments. Despite being just six months old, Arbiter's technology is already operational with over 1,000 clinicians, a feat Carnahan attributes to the backing of family offices that understand the healthcare landscape. Throughout her distinguished career, Carnahan has witnessed various funding cycles, including the high times at Thirty Madison, which reached a valuation of $1 billion before being acquired for over $500 million in September. While she didn't deliberately avoid venture capital, Carnahan recognized that Arbiter needed investors who could provide specialized knowledge and expedite the go-to-market process. In 2022, Carnahan connected with Dr. Eric Moskow, co-founder and chairman of MFO Ventures. Their shared concerns about the fragmented nature of the healthcare system led to Arbiter acquiring a data platform from Moskow's SecondWave Delivery Systems. This acquisition enables Arbiter to consolidate patient data from various sources, allowing for better decision-making in clinical settings. The integration of this technology has significantly advanced Arbiter's market readiness, reducing the timeline by 18 months. While specific financial details of the acquisition remain undisclosed, it represents a small fraction of Arbiter's overall seed funding. Arbiter is simultaneously developing its own AI infrastructure to enhance its offerings, including a feature that uses AI agents to engage directly with patients—scheduling visits and following up post-appointment. The company envisions a comprehensive operating platform for healthcare that will debut next year, partnering with a major national payer and provider network to streamline referral automation. Carnahan describes Arbiter as the 'conductor' of the healthcare orchestra, aiming to unify various tools into a cohesive system. The company is also exploring further acquisitions to solidify its growth strategy, focusing on technologies that can enhance patient care prior to hospital visits, such as managing prior authorizations. Arbiter aims to shift healthcare from a reactive to a proactive model, utilizing predictive AI to anticipate health events. With formidable competitors in the field, including Hippocratic AI and DexCare, Arbiter has assembled a strong advisory board, including notable figures like Dr. Clive Fields and Dr. Ainsley MacLean, to navigate the challenges ahead. MacLean, who sees Arbiter as a transformative force in healthcare, believes the startup's technology can pave the way for groundbreaking innovations in the sector.