Ethos, a modern model risk management platform, announced a seed investment of $6 million to become the gold-standard platform enabling financial institutions and fintechs to manage model risk. This funding round was led by Canapi Ventures, with participation from Capital One Ventures and Better Tomorrow Ventures.
Financial institutions depend extensively on AI, machine learning, and other data-driven models to make critical decisions, from lending and loss forecasting to fraud detection and anti-money laundering efforts. The acceleration of GenAI and sophisticated modeling techniques create challenges and opportunities across the industry.
This evolving landscape inspired Ethos CEO and co-founder Jett Oristaglio during his time as Product and Data Science Lead of Trusted AI at DataRobot. And working closely with financial services customers, Oristaglio recognized the opportunity to build technology that could help institutions of all sizes to scale their model risk management capabilities while maintaining the highest standards of governance.
Ethos’s platform is purpose-built for financial institutions, which was designed to enhance risk management practices while providing the agility and efficiency needed to scale. And the platform enables organizations to accelerate the deployment of new models and products while maintaining rigorous risk management standards.
Ethos works with one of the largest U.S. financial institutions and aims to serve banks, credit unions, and fintechs of all sizes. Better Tomorrow Ventures, an early investor, remains confident in Ethos’s potential.
With the new funding round, Ethos plans to expand its engineering team and strengthen its go-to-market efforts. This will ensure the platform meets the evolving needs of risk professionals and empowers financial institutions to navigate future challenges and opportunities with confidence.
KEY QUOTES:
“At Ethos, we’re committed to empowering financial institutions to shape the future of the industry. We believe model risk management should be a driver of innovation, not a barrier. Our platform enables organizations to deploy AI and other models with the speed and confidence needed in today’s dynamic environment.”
- , CEO and co-founder of Ethos
“We have engineered Ethos from the ground up to tackle the unique technological, operational and regulatory needs of financial institutions,” said Fotinakis. “Our goal is to help customers turn robust risk management into a competitive advantage.”
- Co-founder and CTO Mike Fotinakis, who brings over 20 years of experience building software teams and enterprise platforms to the company’s technical vision
“Effective risk management is more than just a regulatory checkbox—it’s the backbone of profitability. If you don’t understand your risks, how can you understand your business?” said Fisher. “We are intimately familiar with the challenges faced by model risk management teams and regulators, and excited to build the solution that helps risk teams become strategic partners in their institution’s success.”
- Kristen Fisher, Head of Risk Innovation at Ethos, who brings over 10 years of experience leading model risk functions in financial institutions to the platform
“When we met Jett and Mike through our accelerator program in 2023, we knew they had uncovered a critical need in the banking system. We’re looking forward to working with the team to build a product that will become a staple across all financial institutions and fintechs.”
- Sheel Mohnot, co-founder of Better Tomorrow Ventures
“Given Canapi’s proximity to the banking system, we deeply appreciate how model risk management (MRM) processes govern the deployment and utilization of models. For banks and other financial institutions to adopt GenAI and expand their use of decisioning models, existing systems for handling MRM will not suffice. This is what initially drew us to Ethos and sparked our enthusiasm to invest right away. We believe Ethos will enable banks of all sizes to maintain robust MRM programs, allowing them to safely and swiftly deploy new technologies like GenAI and serve as an accelerator for forward-thinking enterprises.”
- Jeffrey Reitman, General Partner at Canapi Ventures
“There is an enormous opportunity for financial institutions to continue to innovate responsibly in service to customers,” said Kim. “We’re excited about Ethos’s vision to modernize model risk management and help the industry stay both resilient and forward-thinking long into the future.”
- Phil Kim, Partner at Capital One Ventures
