Frugal AI, a pioneering company in application cost optimization, announced the closing of a $5 million seed funding round to advance its Application Cost Engineering (ACE) platform, designed to curb the growing costs of AI and cloud services directly at the source code level. Whitecap Venture Partners led the round with participation from Mistral Venture Partners, as well as the founders of Snyk and CloudCheckr. The company was founded by serial entrepreneurs Mike Weider, Craig Conboy, and Rob Calendino.
Frugal’s ACE platform introduces a new approach to FinOps by enabling development and finance teams to control cloud and AI expenditures before they reach production. With enterprise cloud and AI spending projected to approach $1 trillion globally, Frugal aims to address inefficiencies that can consume more than 10% of top-line revenue for many technology companies.
The company’s flagship offering, Frugal Code, integrates cost management directly into the software development lifecycle through three key innovations designed to transform how engineers monitor and optimize costs. The Cost-to-Code feature provides a granular view of cloud and AI expenses down to the application, service, function, and line-of-code level.
Frugal Fixes continuously monitors production applications to identify inefficiencies and automatically generates code-level optimizations, resulting in quantifiable savings. Meanwhile, Frugalbot, a conversational AI assistant, allows developers to query and visualize cost data within their codebase. It integrates with platforms such as GitHub and AI coding agents to provide real-time cost guidance during development.
Currently available in Tech Preview, Frugal Code will officially launch commercially in the first quarter of 2026. Early access is now open at frugal.co, with initial integrations supporting AWS, GCP, Datadog, New Relic, Anthropic, and OpenAI. Support for Microsoft Azure and additional services is planned.
Frugal AI positions itself as the next evolution of FinOps for the AI and cloud era, enabling developers to achieve cost-efficient operations without slowing innovation. By analyzing source code alongside observability data and cloud billing information, the platform proactively detects and resolves costly coding patterns, automatically generating pull requests that lead to measurable savings.
KEY QUOTES:
“Cloud and AI costs are quietly eroding software margins. Our first-of-its-kind solution for automating code efficiency will deliver much needed savings without slowing development.”
Mike Weider, CEO and Co-Founder, Frugal AI
“Building cost control into the development process makes far more sense than waiting for things to spiral out of control. This is a massive market and we’re excited to help the team bring their vision to life.”
Russell Samuels, Partner, Whitecap Venture Partners
