An artificial intelligence startup that sells software to investment banks and other financial institutions is in talks to secure more than $100 million in new funding at a valuation exceeding $1 billion, according to people familiar with the matter.
The funding round has not yet been finalized and terms could shift, the people said, asking not to be identified because the discussions are private. One of them noted the round could expand to as much as $150 million, depending on investor demand. Model ML declined to comment.
Banking is increasingly turning to AI for fraud detection, risk assessment, automating trading and research, and portfolio management. In recent weeks, Anthropic PBC and OpenAI have introduced tools aimed at institutional finance giants, while banks themselves are developing proprietary technology. JPMorgan, for instance, has built an AI chatbot to assist employees with spreadsheet tasks, document creation, and complex problem-solving.
Founded in 2023, Model ML develops AI agents designed to automate document-heavy workflows such as pitch materials, due diligence reports, and investment memoranda. The startup closed a $75 million Series A round last year, led by FT Partners with participation from existing backers including Y Combinator, QED Investors, 13Books, Latitude, and LocalGlobe. In August, HSBC Asset Management also made an equity investment in the company.
Former HSBC Holdings Chief Executive Noel Quinn and former Deutsche Bundesbank President Axel Weber serve on Model ML's advisory board. Its client roster includes HSBC, PwC, and Deloitte.
Where the opportunity lies
The growing complexity of regulatory requirements and deal documentation has created a significant pain point for bankers, who spend substantial hours on manual document review. Model ML's AI agents aim to cut that burden dramatically, positioning the company at the intersection of productivity software and high-stakes financial compliance.
The competitive landscape is heating up as both established tech giants and well-funded startups target the same efficiency gaps. The ability to secure a valuation of over $1 billion within two years of founding underscores the intense investor appetite for AI solutions that deliver measurable cost savings in the financial sector.
Why so much interest
The potential to reduce overhead costs while speeding up deal timelines is a powerful selling point. Investment banks handle enormous volumes of paperwork, and any tool that can reliably take over parts of that process holds clear financial appeal.
Institutional clients also face growing pressure to show they are adopting modern technology. That dynamic, combined with the visible backing from respected industry veterans on the advisory board, helps explain why investors are lining up to participate in this round despite the company's relatively short operating history.