FraudScope, an enterprise software-as-a-service platform aimed at reducing health care billing claims fraud, waste, and abuse, raised $1.5 million in seed round funding from Spider Capital, GRA Venture Fund, TechSquare Labs, Mosley Ventures and others. The company will use the funds to scale customer acquisition and expand product development.
Atlanta-based FraudScope is a startup in the Advanced Technology Development Center’s ATDC Accelerate portfolio. Health care fraud in the United States is estimated to be $270 billion every year. Health care scams are constantly evolving, and current detection techniques and whistleblowers only uncover a small fraction of this. This increases the country’s health care costs to hospitals, insurance companies, and the government. This burden then translates to higher costs for U.S. taxpayers and increased consumer insurance premiums.
To counter this, FraudScope’s machine learning-based technology detects and stops fraud trends in a timely manner. Investigators can also use the platform to conduct a full investigation. FraudScope’s comprehensive claims investigation platform empowers fraud analysts by automatically identifying constantly evolving fraud, waste and abuse trends before claims are paid.
“Health care fraud has become a major problem that harms individuals and health plans” said Musheer Ahmed, FraudScope’s co-founder and CEO. “We are thrilled to have these investors back us as we lead the fight against healthcare fraud, waste and abuse.”
FraudScope was co-founded by Mustaque Ahamad, professor at Georgia Tech and cofounder of Pindrop, an ATDC Signature graduate company. A winner of the 2016 Atlanta Startup Battle, FraudScope’s patent-pending technology is based on research done at the Georgia Institute of Technology. It was further developed for commercialization in Tech’s VentureLab incubator, which helps Institute faculty, researchers, staff, and students commercialize their research ideas into viable enterprises.
“Health care is one of the most critical challenges facing the world and Fraudscope can play a part in making it more efficient by reducing waste and fraud,” said Michael Neril, Managing Partner at Spider Capital. “We’re excited about Fraudscope’s opportunity to solve a big problem while positively impacting the country’s health care system.”
“We are proud to see research discovered in Georgia is poised to solve a significant need in the health care industry,” Michelle Jarrard, Managing Director of the GRA Venture Fund adds. “This financing round is a terrific example of how investors, local and non-local, are working in collaboration to support Atlanta’s aspiring entrepreneurs.”
Allen Nance, Partner at TechSquare Labs, will join FraudScope’s board of directors. Other investors in the round include Service Provider Capital Fund and Vijay Balasubramaniyan, Pindrop’s co-founder and CEO.