Scarlet raises £40m led by Headline with Notion Capital
This article covers Scarlet, a London healthtech startup, which has raised £40m in a series B funding round led by Headline. The capital will be used to expand Scarlet’s certification service into the United States and Asia-Pacific and to broaden its certification offerings, supporting developers of AI-driven medical devices and healthtech startups seeking faster regulatory assessment.
Scarlet, a London healthtech startup, has raised £40 million in a series B funding round led by Headline. The capital will be used to expand Scarlet’s certification service into the United States and Asia-Pacific, grow its roster of expert AI reviewers and engineers, and broaden its certification offerings for software and AI medical devices.
Why it matters
AI-powered medical devices are being developed far faster than traditional certification processes can assess them. Developers can train diagnostic models in weeks but face regulatory assessments that often take 12 to 18 months, with further delays of six to eight months for minor updates. That lag slows the pace at which potentially life-saving tools reach patients and limits how quickly developers can iterate safely.
Scarlet positions itself as a specialist certification body built to let AI-driven medical technology move more quickly through regulatory pathways while keeping oversight and evidence transparent. Its designations from the EU, the UK’s MHRA, and recognition by the US FDA as a Third Party Review Organization give it cross-jurisdictional reach that matters for companies selling into multiple markets.
Inside the product
Scarlet operates an AI-enabled platform where customers upload technical documentation in any format. Qualified reviewers then assess submissions against relevant regulations and issue certification decisions. The company says every assessment is consistent and evidenced, enabling regulators to inspect the reasoning behind certification decisions at any time.
The firm offers a subscription model that covers ongoing surveillance, annual audits, and product changes, which is aimed at supporting frequent, iterative updates to AI-driven products. Scarlet notes it is the only organisation among roughly 52 designated under the EU Medical Device Regulation that specialises specifically in software and AI, a niche that aligns with the rising use of large language models and computer vision in clinical tools.
Named customers include Flo Health (a consumer health app with more than 500 million downloads), US radiology firm DeepHealth, NHS England, cancer-detection company Skin Analytics, and AI scribe providers Heidi Health and Tandem, both of which recently announced nine-figure Series B fundraises. These examples show how Scarlet’s service is being used by both consumer-facing and clinical AI products.
Who are the investors?
The £40 million round was led by Headline. New investor Notion Capital joined the raise alongside existing backers Atomico, Creandum, Kindred Capital, and Entrepreneurs First. Headline partner Nancy Xiao McLaughlin will join Scarlet’s board.
Headline framed the investment as backing a company that can speed regulatory review without sacrificing rigour. The round adds a mix of European venture capital firms with histories of investing in deeptech and health-focused startups, reflecting continued interest from healthtech investors in services that bridge regulation and product development.
In the announcement, Nancy Xiao McLaughlin, Partner at Headline, said:
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. Scarlet has superpowers that seem at odds: they are fast, consistent, thorough, and rigorous. The team is devoted to its customers and takes seriously its mission to get life-saving technology to people faster. We’re excited to lead the Series B and for everything ahead.
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Founder perspective
Scarlet was founded in London in 2021 by James Dewar and Jamie Cox after they worked on AI medical devices at Babylon Health. The founders spent the company’s first three years working with regulators to obtain formal designations before issuing certificates, a deliberate tactic to ensure regulatory alignment from day one.
In the announcement, James Dewar, Co-founder & CEO, said:
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. We’re building AI-native certification to help our customers bring cutting-edge innovation to patients around the world.
Customer testimony underlines the operational impact. In the announcement, Finn Stevenson, Co-founder & CEO of Flok Health, said:
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.
The bigger picture
Scarlet’s raise highlights a growing market for regulatory infrastructure tailored to AI and software in healthcare. As AI models become central to diagnostics, triage, and clinical workflows, startups face a choice: adapt to lengthy legacy certification processes or use specialised third-party assessors to enable more iterative development. Scarlet sits at that intersection.
The company’s EU, UK, and US designations are strategically important for companies seeking multi-market launches. For UK-founded healthtech startups, access to a provider recognised by the FDA and by EU and UK regulators reduces duplication and friction when scaling internationally.
This funding round also speaks to investor appetite for businesses that de-risk regulatory pathways rather than only for product-side innovation. As regulators update rules and tooling for AI in healthcare, services that translate compliance requirements into repeatable workflows will be central to getting new technologies to patients safely and at speed.
The deal illustrates how UK healthtech innovation increasingly depends on specialised regulatory partners to move from prototypes to deployed clinical tools across Europe, the UK, and the United States.
They've invested in Scarlet
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| Investors | Investment Focus | Startup Investments | Round Size | Connect |
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 Headline( ) San Francisco, US  | ||||
 Notion Capital( ) Notion Capital is an early-stage venture capital firm that specialises in softwa... London  | ||||
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 Kindred Capital( ) Kindred is a venture capital firm founded in 2015, focused on early-stage invest... London | ||||
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