Ethos, a modern model risk management platform, has raised $6 million in seed funding to help financial institutions and fintechs manage model risk with confidence. The funding round was led by Canapi Ventures, with participation from Capital One Ventures and Better Tomorrow Ventures.
With AI, machine learning, and data-driven models now at the core of decision-making in banking—spanning lending, fraud detection, and anti-money laundering—model risk management (MRM) has become a pressing challenge. The rise of Generative AI (GenAI) and complex modeling techniques is pushing financial institutions to seek more advanced risk management solutions.
Addressing a Growing Need in the Financial Industry
A recent Risk Management Association survey found that financial institutions struggle with rising costs, talent shortages, and outdated technology in managing model risk. Recognizing this gap, Ethos CEO and co-founder Jett Oristaglio leveraged his experience at DataRobot to develop a platform that enables financial institutions to scale their model risk management while maintaining strict governance standards.
“At Ethos, we believe model risk management should drive innovation, not hinder it,” said Oristaglio. “Our platform helps organizations deploy AI and other models with speed and confidence in today’s fast-changing environment.”
Ethos’s platform is designed to:
- Enhance risk management practices
- Enable faster model deployment
- Ensure compliance with evolving regulations
A Team Built for Innovation
Ethos is backed by a leadership team with deep expertise in risk management and enterprise technology:
- Co-founder & CTO Mike Fotinakis brings 20+ years of experience in building enterprise platforms.
- Kristen Fisher, Head of Risk Innovation, has over a decade of experience leading model risk teams in financial institutions.
“Effective risk management isn’t just a regulatory requirement—it’s the foundation of profitability,” said Fisher. “If you don’t understand your risks, you don’t understand your business.”
Why Investors Are Betting on Ethos
Ethos has already partnered with one of the largest U.S. financial institutions and aims to serve banks, credit unions, and fintechs of all sizes. Investors are confident in its potential to transform model risk management:
- Better Tomorrow Ventures: “We saw Jett and Mike uncover a critical need in the banking system through our accelerator program in 2023,” said Sheel Mohnot, co-founder. “We believe Ethos will become a staple for financial institutions and fintechs.”
- Canapi Ventures (Lead Investor): “For banks to adopt GenAI and expand their decisioning models, existing MRM systems won’t suffice,” said Jeffrey Reitman, General Partner. “Ethos enables banks to maintain robust MRM programs and safely deploy new technologies.”
- Capital One Ventures: “There’s a huge opportunity for financial institutions to innovate responsibly,” said Phil Kim, Partner. “Ethos’s vision ensures the industry remains resilient and forward-thinking.”
What’s Next for Ethos?
With its $6M in seed funding, Ethos plans to:
- Expand its engineering team
- Strengthen go-to-market strategies
- Enhance platform capabilities to meet evolving risk management needs
The company, founded in 2023 and headquartered in New York, has already obtained SOC 2 certification, reinforcing its commitment to security and compliance.
As AI-driven decision-making becomes the norm, Ethos is positioning itself as the gold-standard platform for financial institutions to manage risk, innovate, and stay ahead of regulatory challenges.
About Ethos
Founded by Jett Oristaglio and Mike Fotinakis, Ethos is revolutionizing model risk management for the financial sector. The company’s purpose-built platform helps banks and fintechs deploy AI models while mitigating risk and ensuring compliance.
With the backing of leading investors, Ethos is on a mission to modernize risk management and empower financial institutions to navigate the future with confidence.
For more details and structured learning, please explore our Fraud Risk Management Course.
