Ethos Secures $6M to Modernize Model Risk Management for Banks and Fintechs

NEW YORK, Feb. 27, 2025 /PRNewswire/ -- Ethos, the modern model risk management platform, announced today a seed investment of $6M to become the gold-standard platform enabling financial institutions and fintechs to manage model risk with confidence. The funding round was led by Canapi Ventures, with participation from Capital One Ventures and Better Tomorrow Ventures.

Financial institutions today rely 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 adoption and sophisticated modeling techniques create both challenges and opportunities across the industry. A recent survey by the Risk Management Association highlights how financial institutions are seeking new solutions to enhance their model risk management capabilities in response to increasing costs, talent gaps, and technology limitations.

This evolving landscape inspired Ethos CEO and co-founder Jett Oristaglio during his tenure as Product and Data Science Lead of Trusted AI at DataRobot. 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.

"At Ethos, we're committed to empowering financial institutions to shape the future of the industry," said Jett Oristaglio, CEO and co-founder of Ethos. "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."

Ethos's platform is purpose-built for financial institutions, designed to enhance risk management practices while providing the agility and efficiency needed to scale. The platform allows organizations to accelerate the deployment of new models and products while maintaining rigorous risk management standards.

Co-founder and CTO Mike Fotinakis brings over 20 years of experience building software teams and enterprise platforms to the company's technical vision. "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."

Kristen Fisher, Head of Risk Innovation at Ethos, brings over 10 years of experience leading model risk functions in financial institutions to the platform. "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."

Ethos is currently working 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.

"When we met Jett and Mike through our accelerator program in 2023, we knew they had uncovered a critical need in the banking system," said Sheel Mohnot, co-founder of Better Tomorrow Ventures. "We're looking forward to working with the team to build a product that will become a staple across all financial institutions and fintechs."

Leading the seed round, Canapi Ventures also sees a strong future for Ethos. "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," said Jeffrey Reitman, General Partner at Canapi Ventures. "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."

Phil Kim, Partner at Capital One Ventures, adds: "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."

With the new funding, Ethos plans to expand its engineering team and strengthen its go-to-market efforts—ensuring the platform meets the evolving needs of risk professionals and empowers financial institutions to navigate future challenges and opportunities with confidence.

About Ethos

Ethos is revolutionizing model risk management for the financial sector through its modern, purpose-built platform. Founded in 2023 by tech veterans Jett Oristaglio and Mike Fotinakis, the New York-based company helps banks and fintechs deploy models that make critical decisions while effectively mitigating risk and maintaining regulatory compliance. Ethos has obtained SOC 2 certification, showcasing their commitment to security and compliance.

For more information, visit www.ethosai.com or email [email protected].

SOURCE Ethos