Scarlet raises $50M Series B to certify AI medical devices

London-based Scarlet has raised a $50M Series B led by Headline, with Notion Capital joining existing backers Atomico, Creandum, Kindred Capital and Entrepreneurs First, to expand its AI medical device certification business into the US and Asia-Pacific.

Getting an AI medical device certified in Europe can take longer than building it. And yet the company attacking that queue is not a lobbying shop in Washington – it is a London startup that spent three years becoming a regulator itself. Below, I lay out the round, the company behind it, and why a US fund just led a round into Europe’s regulatory plumbing.

A $50M bet on the certification queue

Scarlet announced the $50M Series B on 12 October 2026. Headline led the round, and the firm’s partner Nancy Xiao McLaughlin joins Scarlet’s board. Notion Capital came in as a new investor, alongside the company’s existing backers Atomico, Creandum, Kindred Capital and Entrepreneurs First.

The money goes to expansion in the US and Asia-Pacific, to growing Scarlet’s teams of expert AI reviewers and engineers, and to broadening its certification offerings. The round takes the company’s total raised past $75M, after a £6M seed organised by Creandum in August 2022 and a $17.5M Series A led by Atomico in June 2024.

“Scarlet helps regulation work with and for, not against, innovation,” said McLaughlin in the announcement.

Three years to become a regulator

Scarlet was founded in London in 2021 by James Dewar and Jamie Cox, who both built AI medical devices at Babylon Health and lived the approval queue from the manufacturer’s side. Their answer was unusual: instead of selling compliance software, they built a certification body – and spent their first three years working with regulators to get designated before issuing a single certificate.

That patience bought something rare. Scarlet is today an EU MDR notified body, an MHRA-approved body in the UK, and recognised by the US FDA as a Third Party Review Organisation. The company says it is the only one of the EU’s roughly 52 MDR-designated notified bodies that specialises in software and AI. Customers pay a subscription that covers ongoing surveillance, annual audits and product changes – a model built for software that ships updates monthly, not for hardware that changes every five years.

The client list reads like a map of European health AI: Flo Health (which has reported over 500 million downloads), NHS England, Skin Analytics, DeepHealth, and AI scribe companies Heidi Health and Tandem Health. “Scarlet has built a Notified Body for the AI world,” said Finn Stevenson, co-founder and CEO of customer Flok Health, in the announcement.

A $16.5bn market compounding at 25.1%

The market Scarlet’s customers sell into is moving fast: AI medical devices are estimated at $16.5bn in 2026 and projected to reach $154.2bn by 2036, a 25.1% CAGR (Meticulous Research, June 2026). The bottleneck is not the models – Scarlet says training an AI diagnostic can take weeks, while a certification assessment takes 12 to 18 months and a minor update another six to eight. A market compounding at 25% a year cannot wait 18 months per release; whoever shortens that cycle sits on every roadmap in the sector.

For scale, this is one of the larger European health rounds of the month in our records: the same week, Yazen raised €50M from Verdane for digital obesity care, and Vocca raised $20M led by Norrsken VC for its AI medical receptionist. Scarlet is the only one of the three selling to the other two’s category.

Compliance is becoming Europe’s home advantage

So what does a US fund leading a round into a London notified body actually signal? We spent years calling the EU MDR a burden on our medtech founders – and the queue it created is real. The good news is that the same rules created a scarce, government-designated asset that no amount of venture money can shortcut: designation takes years, and Scarlet already has it in three jurisdictions. What we are seeing is regulatory capacity itself becoming venture-backable infrastructure, the picks and shovels of health AI.

The direction of travel is the striking part. The usual pattern is European companies queueing for FDA approval; here, a credential earned under Europe’s strictest-in-class rules travels west, with the FDA recognising a London-built reviewer. And the EU AI Act is about to add another conformity layer on top of MDR – every new layer makes the designated few more valuable.

What to watch: whether Scarlet’s US and Asia-Pacific push turns European designation into a global standard, and whether other regulated corners of our ecosystem – from the rounds we track daily, defence and fintech look next in line – produce their own certification-body startups. The opportunity is clear: in health AI, the queue is where the money now forms. Watch the certification layer.