Scarlet, a company that certifies AI-powered medical software and other digital health products, has raised $50 million in Series B funding. The round was led by Headline, with participation from new investor Notion Capital and existing investors Atomico, Creandum, Kindred Capital and Entrepreneurs First. Nancy Xiao Mclaughlin, a partner at Headline, will also join Scarlet’s board.
AI-powered medical devices are being developed quickly, but getting them approved for use can take much longer. Companies can build an AI diagnostic model in just a few weeks, yet the certification process may take 12 to 18 months. Even small updates to an approved product can face another six to eight months of delays, slowing the development of new healthcare technology.
Scarlet is an officially designated organisation that checks whether medical devices meet the required safety and regulatory standards. According to the company, it is the only organisation among around 52 bodies designated under the EU Medical Device Regulation that focuses specifically on software and AI. Its approach is designed to support the frequent updates and improvements common in AI products.
Scarlet has received recognition from the European Union and the UK’s Medicines and Healthcare products Regulatory Agency (MHRA). In the United States, it is recognised by the Food and Drug Administration (FDA) as a Third Party Review Organisation. These designations allow Scarlet to assess medical software and AI products against the relevant regulatory requirements in these markets.
James Dewar and Jamie Cox founded Scarlet in London in 2021. Before starting the company, they worked on AI-powered medical devices at Babylon Health. Scarlet spent its first three years working with regulators to obtain the necessary designations before issuing its first certificates.
Medical technology companies upload their technical documents to Scarlet’s AI-powered platform in different file formats. Qualified human reviewers then examine the documents to determine whether the products meet the relevant regulations. Based on this assessment, Scarlet makes a certification decision that determines whether a product meets the requirements to enter the market.
Scarlet works with companies developing advanced medical technology, including products that use large language models (LLMs) and computer vision. Its customers include Flo Health, which has reported more than 500 million downloads; US medical imaging company DeepHealth; NHS England; cancer-detection AI company Skin Analytics; and AI medical scribe companies Heidi Health and Tandem.
Scarlet also reviews how AI medical products are developed and maintained over time. Customers pay a subscription that covers ongoing monitoring, annual audits and product updates. The company keeps its assessments consistent and documents the evidence behind its findings, allowing regulators to understand how certification decisions were made. This approach helps medical technology companies improve their AI products while continuing to meet regulatory requirements.
“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,” said Finn Stevenson, co-founder and CEO of Flok Health.
“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,” said James Dewar, Scarlet’s Co-founder & CEO.
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,” said Nancy Xiao McLaughlin, Partner at Headline.
Scarlet will use the new funding to expand its business in the United States and Asia-Pacific region, hire more AI experts and engineers, and offer a wider range of certification services.
