Scarlet, which operates as a government-designated certification body for AI and software-based medical devices, has closed a $50 million Series B funding round. Headline led the investment, joined by newcomer Notion Capital alongside returning backers Atomico, Creandum, Kindred Capital, and Entrepreneurs First. Nancy Xiao Mclaughlin, a partner at Headline, will take a seat on Scarlet's board.

The London firm was founded in 2021 by James Dewar and Jamie Cox, both formerly at Babylon Health where they developed AI medical devices. The company spent its first three years working with regulators to secure the necessary designations before issuing its first certificates. Today, Scarlet holds approvals from the EU, the UK's MHRA, and the US FDA, where it operates as a Third Party Review Organisation.

The certification landscape reveals a significant gap: among roughly 52 organisations designated under the EU Medical Device Regulation, Scarlet claims to be the sole body that specialises exclusively in software and AI, and was purpose-built to accommodate AI's rapid iteration cycles. The problem it addresses is acute—developers can train an AI diagnostic model in weeks, yet face 12 to 18 months of assessment time from traditional certification bodies, followed by another six to eight months of delays for approvals of minor updates.

Scarlet's platform accepts technical documentation in any format, which qualified reviewers then evaluate against applicable regulations to determine market readiness. The company also certifies the development practices behind AI products themselves, offering subscription-based services that include ongoing surveillance, annual audits, and assessments of product modifications. Every assessment maintains consistency and evidence trails, allowing regulators to examine the reasoning behind certification decisions whenever needed.

The customer base spans major players across healthcare and consumer health sectors. Flo Health, a consumer health platform with over 500 million downloads, relies on Scarlet's certification, as does DeepHealth, a US radiology company, NHS England, Skin Analytics which focuses on cancer detection, and AI scribes including Heidi Health and Tandem—both of which recently secured nine-figure Series B rounds.

Finn Stevenson, co-founder and CEO of Flok Health, commented on the impact: "Scarlet has built a Notified Body for the AI world. The ability to release more rapid and frequent upgrades to our medical device ensures that our patients always have access to world-class care. We want to release upgrades to our medical device twice a month. We can with Scarlet."

James Dewar, Scarlet's co-founder and CEO, framed the mission in broader terms: "For every day that safe and effective medical technology is not available, someone's life takes a different course. Scarlet exists to solve this problem."

Nancy Xiao McLaughlin of Headline added context on Scarlet's approach to regulation: "Scarlet helps regulation work with and for, not against, innovation. James and Jamie experienced the legacy certification process firsthand and decided to become the AI-native market enabler, starting with certifying AI and software as medical devices."

We're building AI-native certification to help our customers bring cutting-edge innovation to patients around the world.

Scarlet has superpowers that seem at odds: they are fast, consistent, thorough, and rigorous. The team is devoted to its customers and takes seriously its mission to get life-saving technology to people faster. We're excited to lead the Series B and for everything ahead.

Nancy Xiao McLaughlin, Partner at Headline

The capital will fund Scarlet's geographic expansion into the United States and Asia-Pacific regions, bolster its team of expert AI reviewers and engineers, and broaden the range of certifications it offers.

Source: Tech.eu