Kobalt Labs has raised $12.7 million in total funding to automate compliance workflows in financial services, addressing a critical infrastructure bottleneck as AI agents become increasingly embedded in fintech operations. The Series A round of $11 million, announced in December, was led by First Harmonic with participation from Alloy Labs and Y Combinator. The funding underscores growing investor interest in AI compliance automation as financial institutions face mounting third-party risk and regulatory scrutiny.
The company, founded by Kalyani Ramadurgam and Ashi Agrawal, builds AI agents that automate manual compliance work for financial institutions, starting with third-party risk management, internal audit and marketing compliance. Customers include Chime, Bilt, Celtic Bank, Emprise Bank, American National Bank and Meriwest Credit Union, according to the founders.
AI Compliance Automation Addresses Fintech Infrastructure Gap
The funding arrives as multiple fintech companies deploy AI agents across the financial stack. FIS recently launched agentic commerce tools for banks, while Alinea Invest introduced AI-native wealth guidance. Meanwhile, Anthropic has rolled out enterprise AI tools targeting wealth and investment workflows, signaling that major AI labs view financial services as a priority vertical.
However, the proliferation of AI systems in finance creates a structural challenge. Financial institutions cannot scale agentic systems while compliance processes still depend on manual document review and spreadsheet-based tracking, according to Ramadurgam.
“If you want to grow embedded finance safely, you can’t just hire your way through compliance,” Ramadurgam told Forbes. “You have to scale with technology.”
Third-Party Risk Management Becomes the Wedge
Kobalt’s initial focus is third-party risk management, the due diligence banks conduct before onboarding vendors, platforms or fintech partners. The process typically involves reviewing contracts, information security documents, policies and disclosures—work that remains largely manual across the industry.
Banks attempting to scale embedded finance programs face a capacity wall, Ramadurgam said. Without AI compliance automation, institutions may need years and dozens of hires to process the volume of vendor relationships required for growth. Additionally, the lack of standardization in TPRM means processes often vary by institution and individual reviewer.
Agrawal noted that the platform has delivered substantial efficiency gains in client workflows. Marketing reviews have decreased approximately 75 percent in time, while vendor reviews have compressed from hours to minutes in some cases, based on internal metrics shared by the company.
How Kobalt Differentiates From Existing Compliance Software
Traditional vendor risk management platforms from providers like ProcessUnity and Venminder have long supported third-party workflows. Separately, regulatory intelligence companies such as Compliance.ai focus on monitoring regulatory changes and mapping rules to controls.
Kobalt’s claim is that existing tools organize the process but do not eliminate the core work of reading, comparing and interpreting large document volumes. The company’s AI performs the initial document analysis, surfacing issues for human review so compliance teams focus on judgment rather than scanning.
In contrast to workflow management systems, Kobalt positions itself as eliminating the manual labor itself. “That’s why most of them are not much better than a spreadsheet,” Ramadurgam said, referring to incumbent platforms.
Founders Bring Technical Depth and Domain Experience
Ramadurgam’s background includes working at Apple, where she was responsible for blocking individuals on terrorism watch lists from using Apple Pay. In a Forbes profile tied to her Forbes Under 30 recognition, she described how even at Apple the compliance process remained analog and document-heavy.
Agrawal worked at Affirm before the two met at Stanford and went through Y Combinator together. Their fundraising approach emphasized fundamentals over growth hacking, with Ramadurgam stating that the best fundraising strategy is to build a strong company and let customer references validate the product.
Why Compliance Infrastructure Matters for Fintech’s Next Phase
The rise of AI agents in consumer-facing fintech applications creates downstream pressure on compliance operations. If agentic systems will shop, invest and transact on behalf of consumers, financial institutions must ensure governance infrastructure can operate at the same velocity as product development.
Third-party risk multiplies with each new integration, partnership and AI tool adoption. Every relationship expands the surface area for compliance failures that can result in consumer harm and enforcement actions, potentially stalling growth for years.
Beyond TPRM, Kobalt screens marketing materials against regulatory expectations, flagging missing disclosures or misleading claims. This allows teams to accelerate product launches without bypassing consumer protection requirements, according to the company.
As AI labs like Anthropic build finance-specific plug-ins and agentic commerce platforms reshape transactions, compliance is emerging as the gating function for scale. The competitive advantage in fintech may shift from who builds the most sophisticated agent to who builds the infrastructure that makes AI agents safe enough to deploy at scale.
The company has not disclosed specific revenue metrics or customer growth targets. However, the ability to process compliance workflows at AI speed will become increasingly critical as financial institutions navigate the tension between innovation velocity and regulatory risk in an agent-driven future.
