Modern model risk management startup Ethos AI Inc. announced today that it has raised $6 million in new funding to expand its engineering team, enhance its go-to-market efforts and strengthen its platform to help financial institutions manage model risk and deploy artificial intelligence-driven decision-making models.

Founded in 2023, Ethos offers a platform specifically designed to streamline every stage of model risk management for financial institutions. MRM is the process of overseeing and mitigating the potential adverse effects resulting from decisions based on incorrect or misused models. The Ethos platform offers solutions from model development and documentation to validation and automated reporting, ensuring efficiency and compliance.

The company’s platform provides real-time visibility and automation across the entire model ecosystem to allow organizations to manage both traditional and advanced AI models effectively. Taking a holistic approach, the company says, ensures that all risk artifacts are tracked, managed and connected for a unified view of the institution’s risk landscape.

Ethos incorporates intelligent automation through customizable workflows that streamline complex risk activities and reduce manual bottlenecks, improving effective collaboration among teams across all three lines of defense. Additionally, automated documentation and approval processes accelerate risk management tasks while maintaining rigorous standards.

One feature of the platform, called Governed Inventories, serves as a single source of truth for all models to ensure trust, validation and alignment throughout the organization. The centralized approach enhances oversight and control, all while promoting consistency and reliability in model governance.

While relatively young, Ethos is already finding customers, including one of the largest U.S. financial institutions. The company aims to serve banks, credit unions and fintechs of all sizes.

“We believe model risk management should be a driver of innovation, not a barrier,” said co-founder and Chief Executive Jett Oristaglio. “Our platform enables organizations to deploy AI and other models with the speed and confidence needed in today’s dynamic environment.”

The seed round was led by Canapi Ventures LP, with Capital One Ventures Corp. and Better Tomorrow Ventures also participating.

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