Artificial Intelligence & Machine Learning , Governance & Risk Management , Next-Generation Technologies & Secure Development

Relyance AI Raises $32M to Take on AI Governance Challenges

A data governance startup and former RSA Conference Innovation Sandbox contest finalist raised $32 million to bring data protection, privacy and AI governance to enterprises.

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Relyance AI will use the Series B investment to help businesses manage complex data processing while ensuring compliance with global privacy regulations including GDPR, HIPAA and the European Union's AI Act. The San Francisco-based company said its integration of privacy and security governance onto a single unified platform allows organizations to trust AI-driven data use while avoiding costly compliance risks.

"It's impossible to keep up with the current state of regulations, especially when GDPR, HIPAA, the EU's AI Act and a mosaic of local U.S. privacy laws are all different and sometimes at odds," CEO Abhi Sharma said in a statement. "We're making it possible to demystify this and embolden the C-suite, engineers and legal teams to urgently green-light AI in the enterprise with an integrated governance approach."

What Sets Relyance AI's Approach to Data Governance Apart

Relyance AI, founded in 2020, employs 67 people and emerged from stealth in September 2021 with $30 million in seed and Series A funding. The firm was one of 10 finalists in RSA's 2023 Innovation Sandbox content, but ultimately lost to HiddenLayer. Relyance AI has been led since its inception by Abhi Sharma, who previously led ML and analytics for industrial and commercial IoT software firm FogHorn.

The company's Series B funding round was led by Thomvest Ventures with participation from M12 - Microsoft's Venture Fund - Cheyenne Ventures, Menlo Ventures and Unusual Ventures. The money will help Relyance AI scale its platform and broaden its ability to help enterprises adopt AI while staying ahead of data privacy and security challenges (see: How Startups Can Help Protect Against AI-Based Threats).

"We're thrilled to lead the investment in Relyance AI, a unique, automated data governance platform that addresses the urgent need for real-time data visibility and compliance," said Thomvest Ventures' Umesh Padval. "Relyance AI empowers chief privacy, security and information officers to manage data privacy and compliance, avoiding costly penalties while driving safe and responsible AI adoption."

The company's platform provides real-time insights into how personal data is processed and helps organizations maintain compliance with privacy laws, which is critical in managing AI innovation without sacrificing compliance. Relyance AI said it has grown significantly, increasing its enterprise customer base by 30% in the first half of 2024 and is projected to double its annual recurring revenue by year-end.

"This isn't just another milestone; it's the start of a new standard in governance for the AI era," Sharma wrote on LinkedIn. "We are building the world's most comprehensive data protection, monitoring and management platform - one that drives business outcomes by ensuring governance isn't just a function but a force multiplier."

As enterprises adopt AI, there is pressure to meet regulatory demands, and Sharma said it's important to address AI governance and regulatory compliance simultaneously since a fragmented approach could hinder progress. Relyance AI's platform merges privacy and security into one function, offering real-time analysis of data from the source to its usage and storage and giving companies control over their data.

Bringing Security, Privacy Onto a Single Platform

Until now, Relyance AI said privacy and security have been seen as separate challenges, with one woefully unaware of the other. Specifically, the company said privacy teams didn't know if their commitments to regulations and customers were being met, and security teams didn't know what data should be in AI models.

"The era of accepting subpar privacy, DSPM and AI governance solutions is over," Sharma said in a statement. "Relyance AI sets a new standard where data protection and innovation are not mutually exclusive."

Enterprises face challenges in managing customer data in compliance with regulations, with more than two-thirds of businesses expressing concerns about privacy when working with third parties. Relyance AI said it provides continuous data observability to prevent breaches and also helps enterprises avoid the common pitfalls that hinder AI innovation such as concerns over data misuse and non-compliance.

"AI in the enterprise has tremendous innovation potential, but the reality is that many projects are stalling due to the inability to prove that personal data, crucial for AI model training, is being handled securely and in compliance with ever-shifting regulations and increasing customer expectations," Sharma wrote. "The reason is that privacy, security and engineering teams often operate in silos."

Relyance AI focuses on how data is processed and stored, which the company said offers organizations insights from the code level through to contracts and policies. This "bottom-up" approach is essential for ensuring privacy and security by design, Relyance AI said. The firm said its unique value proposition is its ability to offer integrated, real-time visibility into the entire data lifecycle from processing to storage.

"Instead of merely chasing data outputs, we focused on its origins and processing intent," Sharma wrote in a blog post Thursday. "Relyance AI was the first solution to address this at the code and API layer, where trust by design truly begins. By seeking insights from the ultimate source of truth, we provide accurate and holistic answers -free from conversational errors."