If you've spent nearly three decades in healthcare, you've probably seen enough dysfunction to want to fix it yourself. That's exactly what Michelle Carnahan is doing. After 26 years at Eli Lilly (LLY) and a stint as president of virtual care company Thirty Madison, she's launched Arbiter—an AI-powered platform that's trying to make America's notoriously fragmented healthcare system actually work together.

And she's doing it with serious backing: $52 million in seed funding, all from family offices including TriEdge Investments, MFO Ventures, and WindRose Health Investors. That gives the six-month-old startup a $400 million valuation right out of the gate.

Why Skip Traditional VC Money?

Carnahan left Eli Lilly for Thirty Madison in 2020, right before the venture capital boom turned everything into a unicorn hunt. She helped that company reach a $1 billion valuation during the frenzy. Then reality hit—Thirty Madison was acquired by Remedy Meds in September for $500 million, half its peak valuation.

So when it came time to fund Arbiter, Carnahan made an interesting choice: she skipped the traditional VC route entirely. It wasn't some philosophical stance against venture capital, she told Business Insider. It was strategic. She wanted investors who brought more than money to the table—specifically, healthcare expertise and distribution networks that would normally take years to build.

"This gives us not only a knowledge advantage, but a distribution advantage in partnerships that would take years to develop," she explained.

The SecondWave Acquisition

That strategy led to Arbiter's acquisition of SecondWave Delivery Systems, a data platform founded by MFO Ventures co-founder Erick Moskow in 2020. SecondWave does something useful: it aggregates patient data and analyzes it for potential health risks, helping doctors make smarter treatment decisions. For Arbiter, which is trying to connect everyone in the healthcare ecosystem, it was a natural fit.

The deal helped Arbiter move fast. Despite being only six months old, the company is already live with more than 1,000 clinicians, according to Carnahan.

Be the Conductor, Not Another Instrument

Carnahan has a memorable way of describing the problem Arbiter is solving. "Everyone keeps building new instruments for the orchestra," she told Business Insider. "There's a prior auth tool here, an analytics dashboard there, but no one's building the conductor. Arbiter is that conductor."

It's a good metaphor. Healthcare has plenty of technology—electronic health records, billing systems, analytics dashboards, authorization platforms. What it doesn't have is coordination. Arbiter's pitch is that it can be the connective tissue, using AI to unite payers, providers, and patients on a single platform that actually reduces waste and improves outcomes.

"Arbiter's mission is nothing less than to rebuild the operating spine of U.S. healthcare," Carnahan said in the funding announcement. "By aligning payers and providers around the needs of patients, we're transforming healthcare from a fragmented set of parts into a connected system that works for everyone."

Building Beyond the First Product

While Arbiter is developing its own AI infrastructure, Carnahan told Business Insider she's focused on establishing a solid data foundation first. That means more acquisitions are likely—specifically, companies with clear data strategies like SecondWave.

The long-term vision goes beyond just connecting existing systems. Carnahan wants to shift healthcare from reactive to proactive, catching problems before they become emergencies. Closing the coordination gaps, she says, is just step one.

"Healthcare fragmentation isn't an abstract problem—it's deeply human," said Clive Fields, Arbiter board member and founder of VillageMD, in the funding announcement. "Every delay or missed connection represents a patient waiting for care that should already be underway. Arbiter is uniting the system around them, so care can move at the speed of need."

Whether Arbiter can actually deliver on that ambitious promise remains to be seen. But with $52 million in the bank, a $400 million valuation, and a founder who's already helped build one unicorn, it's got a decent shot at trying.