American healthcare still runs on fax machines. And while that fact has launched a thousand conference panels lamenting the industry's technological backwardness, a small New York startup has decided to take a different approach: embrace it.
Coral, which announced a $12.5 million seed round on April 20, isn't trying to kill the fax or bulldoze the byzantine payer portals that define healthcare administration. Instead, the two-year-old company is building AI agents that work within them—automating the drudgery of prior authorizations, benefits verification, and patient intake without forcing hospitals or insurers to rip out the infrastructure they've been using since the Clinton administration.
The bet seems to be paying off, at least in the early innings. Coral says it hit multiple millions in revenue in less than a year—a fast climb for enterprise healthcare software, where sales cycles typically drag and pilots can last longer than some startups' entire existences, though the company has not disclosed specific revenue figures. Lightspeed and Z47 co-led the round, with Lightspeed having led an earlier $2 million seed in October 2025. Total known funding now sits at $14.5 million.
Why Faxes Refuse to Die
The persistence of analog processes in healthcare isn't just inertia, though there's plenty of that. Prior authorizations—the insurance approvals required before certain treatments or medications—still move through a chaotic mix of fax lines, PDFs, and insurer-specific web portals that resist any attempt at standardization. It's a system held together by duct tape and the quiet heroism of back-office staff who've memorized which payer requires which form in triplicate.
This administrative sludge costs the U.S. healthcare system an estimated $450 billion a year. Coral's founders, Ajay Shrihari and Aniket Mohanty—classmates at IIIT Hyderabad who previously built together at LimeChat—saw an opening. Rather than demanding that providers overhaul their workflows, Coral slots directly into existing EHR systems, fax infrastructure, and payer portals.
The company's AI models parse unstructured documents: insurance cards, handwritten intake forms, prior-auth templates that vary wildly between Blue Cross and Cigna. Coral says it achieves 99.7% accuracy, a claim that, if true, would put it well above the threshold where automation becomes genuinely useful instead of just a new source of frustration.
Full patient intakes that used to take days now wrap in under five minutes, according to the company. Early adopters—concentrated in durable medical equipment, infusion centers, and specialty pharmacy—are reporting turnaround times that have collapsed from administrative purgatory to something approaching real-time. DASCO Home Medical Equipment is among the handful of customers Coral has named publicly, though the startup says it's serving "some of the largest" players in its target verticals without offering specifics.
Growing Fast, Perhaps Faster Than Expected
Coral now employs between 11 and 50 people, depending on who you ask (the company hasn't locked down a precise headcount). Some customers are prepaying full contract values upfront—a rare show of confidence in a young vendor, and one that suggests either deep pain points or unusually aggressive sales incentives. The company is targeting 4x growth by the end of 2026, which would be remarkable if they can sustain it.
The fresh capital will go toward hiring in engineering and healthcare operations, naturally. On the product side, Coral is layering in AI-powered voice and text workflows for patient follow-ups, plus a self-service builder that would let providers configure automations without filing IT tickets every time they want to tweak a form. There's also an analytics dashboard in the works—surfacing payer denial rates, workflow bottlenecks, and guidance on resubmissions.
The company is expanding beyond DME into radiology, adding to its existing beachheads in infusion and specialty pharmacy. Whether it can maintain quality and accuracy as it scales across more verticals is the question investors are presumably betting on.
The Infrastructure Gamble
"Healthcare's administrative burden doesn't need to be rebuilt from scratch," Rohil Bagga of Lightspeed said in the funding announcement—a thesis that runs counter to much of the digital health playbook of the past decade. Ashwin KP of Z47 echoed the sentiment, emphasizing integration over disruption.
It's a pragmatic pitch. Replacing entrenched systems is expensive, slow, and politically fraught. If Coral can demonstrate that its agents genuinely reduce workload without introducing new headaches, it might carve out a sizable niche in one of the economy's most stubbornly inefficient sectors.
Whether that niche becomes a category or just a feature that EHR incumbents eventually build themselves remains to be seen. For now, though, Coral seems content to let the fax machines keep humming.
