Ahmed Kerwan, a UK doctor once burdened by medical paperwork, transitioned into entrepreneurship and founded Taxo, a startup leveraging AI to significantly reduce the longstanding administrative burden in healthcare. Taxo recently announced a $5 million seed funding round led by Y Combinator, General Catalyst, and Character Capital, highlighting investor confidence in this innovative solution.
Kerwan shared that early in his medical career, the sheer volume of paperwork was overwhelming. He often spent only three hours a day seeing patients, the rest consumed by administrative tasks like insurance claims. While dozens, even hundreds, of startups are using AI to improve healthcare efficiency – such as Abridge for medical notes and Ambience for AI assistants – Taxo's unique selling point is its core: an AI "reasoning engine".
Image Source: AI-generated image, licensed from Midjourney
According to Kerwan, Taxo's "reasoning engine" transparently explains its decision-making process, crucial for gaining the trust of medical professionals. He noted that as explainable reasoning models became mainstream in AI late last year, Taxo integrated this technology, significantly reducing AI hallucinations and boosting pre-authorized approval rates to 98%, well above the industry average of around 80%.
Taxo's "reasoning engine" isn't built from scratch but leverages existing large language models from OpenAI and Anthropic, adding a specialized medical layer. The company emphasizes its training on hard-to-access, specialized medical data, creating a significant competitive advantage. "We don't want to be easily overtaken every time OpenAI releases a new model," Kerwan stated.
Although the AI reasoning trend is still in its early stages, gaining wider attention only recently with the rise of Chinese startup DeepSeek, investor interest in Taxo suggests this technology is poised for broader adoption beyond foundational AI companies.
Founded last year and based in San Francisco, Taxo, according to TechCrunch, surpassed $1 million in annual recurring revenue just six months after launch. Currently serving around 15 clients, ranging from clinics to government agencies.
Kerwan admits that following the release of ChatGPT, doctors were cautious about its use, primarily because they couldn't trace the reasoning behind its suggestions. He hopes Taxo will change that. "You can see exactly where we get the information and why we provide it," he emphasized, highlighting Taxo's aim to win over medical professionals through its transparent "reasoning engine," ultimately freeing doctors to focus more on patient care.