Toronto-based Armilla AI has raised $6 million CAD ($4.5 million USD) in seed funding to scale its risk assurance product for artificial intelligence (AI) models.
The all-equity funding round closed in December 2023, and featured participation from round lead Mistral Venture Partners as well as MS&AD Ventures, SixThirty Ventures, Morgan Creek Digital, and Y Combinator. To date, the Armilla has raised $7 million USD.
Armilla says the capital will help it expand Armilla Guaranteed, a quality assessment and warranty provider for AI models. Insurance providers Greenlight Re and Chaucer, who also participated in the round, will back Armilla Guarenteed’s warranty should a certified AI model not perform as promised.
“Given that [generative AI] deployment is slowed in most corporations due to risk concerns, our product will play a significant role in unclogging this compliance bottleneck,” Armilla AI founder and CEO Karthik Ramakrishnan told BetaKit in a statement. “Corporate executives and board members can now have the assurance that their risk is minimized when they deploy cutting-edge AI solutions.”
Armilla Guaranteed is a direct result of Armilla’s 2021 pre-seed round, which provided the capital to hire engineers to develop the tool. The round included participation from the Spearhead Fund, Two Small Fish Ventures, and Yoshua Bengio. Bengio, dubbed a “godfather of AI,” has been an outspoken advocate of responsible AI development and has called for corporate and government regulation of the technology.
Armilla was later selected for Lloyd’s Lab 2023 accelerator, which Ramakrishnan described as a 10-week fast-track program where new insurance offerings can be tested and developed with the support of experts from the world’s largest insurance and reinsurance market.
The Armilla Guaranteed platform bases its assessment of an AI model on compliance with global AI regulations, such as the EU AI Act, as well as the prevalence of hallucinations, racial and gender bias, over-complexity, robustness, and security, among other metrics.
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If Armilla is confident in the quality of an AI product, it backs the model with its warranty. Should the backed AI model fail or not perform as promised, a model’s buyer will be reimbursed the licence fee that they paid.
AI model errors have made headlines in recent weeks, with ChatGPT responding to prompts with “gibberish” Tuesday while Air Canada was forced to honour a refund its chatbot seemingly made up out of thin air last week. Ramakrishnan told BetaKit that, hypothetically, if Air Canada had used an Armilla Guaranteed AI model, the error would have been covered by its warranty.
Ramakrishnan said Armilla customers include Private AI, which helps redact personally identifiable information, and Buddi AI, an automated medical reimbursement platform.
Following its seed round, Armilla has brought on Jerry Gupta, former senior vice president of product innovation at SwissRe, to lead the development of its AI offerings. Ramakrishnan said Gupta played a pivotal role in shaping the functionality of Armilla’s AI product warranty and that he will continue to help develop new products beyond its warranty.
Ramakrishnan said Armilla has 13 full-time employees and will likely add another five this year.
Feature image courtesy Armilla AI.
