AI-Powered Startup Raises $27M to Automate Regulatory Compliance Checks

New York-based Norm Ai has raised $27 million in a series A funding round to expand its platform that turns regulations into AI-powered compliance agents.

Founded in 2023, the startup built a platform that turns regulations and corporate policies into computer code. The AI-powered platform uses that code to build AI agents designed to assist compliance teams in conducting checks on products and services.

Private equity firm Coatue led the round, having previously led Norm’s $11.1 million seed round in January.

Citi Ventures, Capital Ventures and New York Life Ventures joined this latest round, with TIAA Ventures and Jefferson River Capital, the family office of former Blackstone president Tony James, also participating.

The startup plans to use the funds to expand its platform and grow its client base. It’s also looking to hire new software engineers and sales staff.

“I've been conducting research at the intersection of AI and law for more than a decade,” said John Nay, Norm Ai’s founder and CEO. “We are now at an inflection point in AI capabilities that, when properly harnessed, unlock massive improvements in regulatory compliance workflows across the economy. To have the series A backing of such notable institutions is a testament to Norm Ai's leadership in regulatory AI."

Related:AI Startup Roundup: Elon Musk’s xAI Looking to Raise up to $6 Billion

Norm’s platform builds “Regulatory AI Agents,” which automate compliance checks for businesses.

Powered by a series of large language models, the startup’s AI agents can identify potential regulatory issues in products or contracts.

The startup's agents are versed in various regulations, including the Clean Air Act, the Affordable Care Act and the Investment Advisers Act. Despite each being hundreds of pages long, the AI agents can scan a product or business contract and highlight potential issues through their extensive understanding of the regulations.

Norm’s AI agents can also work alongside other business automation systems, monitoring the other tools to ensure they comply with corporate and regulatory policies.

Norm said its platform could, for example, help insurance companies and asset managers accelerate the publication of content that would be subject to intense regulations.

“By producing actionable feedback across all regulatory parameters, Norm Ai enables in-the-weeds compliance users to evaluate and finalize content against regulatory requirements in minutes, not days,” according to a company announcement.

"Coatue continues to be impressed by Norm's vision to deliver a comprehensive regulatory AI platform and we are excited by the array of compliance workflows they are already able to support,” said Sri Viswanath, a general partner at Coatue who will join Norm's board. “We are thrilled to double down on Norm as they seek to grow into a transformational AI company, and I look forward to supporting John and his team on their next steps."

Related:OpenAI Acquires Rockset to Boost ChatGPT Performance