Analysis
Scarlet, a London startup that certifies AI and software medical devices, raised a $50 million Series B led by Headline, with new backer Notion Capital joining existing investors Atomico, Creandum, Kindred Capital and Entrepreneurs First, Tech.eu reported. Headline partner Nancy Xiao Mclaughlin is joining Scarlet's board. The company plans to use the funding to expand into the US and Asia-Pacific, hire more AI reviewers and engineers, and broaden the range of certifications it offers.
Why a certification body, not a compliance tool
Scarlet isn't selling software that helps companies comply with regulation -- it IS a regulator, in the sense that matters legally. Founded in 2021 by James Dewar (CEO) and Jamie Cox, both of whom previously built AI medical devices at Babylon Health, Scarlet spent its first three years working with regulators before it could issue a single certificate. It now holds designations from the EU, where the company says it's one of roughly 52 Medical Device Regulation-designated bodies and the only one specializing in software and AI, as well as the UK's MHRA and recognition as a Third Party Review Organization by the US FDA. Customers upload technical documentation to Scarlet's AI-enabled platform, which assesses it against the relevant regulatory framework and issues a certification decision, backed by a subscription covering ongoing surveillance and audits.
“Customers named in the round include Flo Health, which has more than 500 million downloads, plus DeepHealth, NHS England, Skin Analytics, Heidi Health and Tandem.”
The bottleneck Scarlet is attacking is real: certification assessments can take 12 to 18 months, and even a minor product update can trigger 6 to 8 months of re-approval delay, according to the company. Customers named in the round include Flo Health, which has more than 500 million downloads, plus DeepHealth, NHS England, Skin Analytics, Heidi Health and Tandem. Flo Health co-founder and CEO Finn Stevenson put the stakes plainly: "We want to release upgrades to our medical device twice a month," a cadence incompatible with year-long regulatory cycles.
Scarlet's expansion into the US and Asia-Pacific pits it against entrenched incumbents -- BSI Group and TUV SUD dominate notified-body work in Europe and have deep relationships with device makers, while FDA-side review in the US has traditionally run through the agency itself or a small number of accredited third parties. Scarlet's AI-native angle is a genuine differentiator against those slower-moving incumbents, but incumbency and regulatory trust built over decades are hard to out-execute with venture capital alone, and a certification body's reputation is only as good as its first high-profile mistake.
James Dewar framed the company's reason for existing around the cost of delay: "Scarlet exists to solve this problem," pointing to patients who lose access to safe, effective technology every day a certification sits in review. Headline's Mclaughlin added that "Scarlet helps regulation work with and for, not against, innovation" -- a framing investors are increasingly willing to fund as AI medical devices multiply faster than any single regulator can review them. What to watch: whether Scarlet's first US FDA-recognized certifications land within the next two quarters, since that's the proof point that determines if the US expansion is real or aspirational.