Software testing startup Arato wins $10 million to stop companies blindly deploying AI systems

Israeli startup Arato Software Ltd. is building tools for developers to test and evaluate artificial intelligence applications, and it just secured $10 million in seed funding to help it achieve that goal.

Today’s round was led by TLV Partners, with participation from Jibe Ventures. Raghu Raghuram, former chief executive officer of VMware and current partner at Andreessen Horowitz, and Marianna Tessel, former chief technology officer of Intuit Inc., also participated in the round.

Founded in 2024, Arato has built a platform aimed at simulating how users interact with AI applications. This allows organizations to identify potential failures before new systems are introduced into production. Arato’s tools allow developers to simulate thousands of scenarios using text, images, audio, and business data to identify recurring issues in their apps, identify risks, and highlight areas for improvement before analyzing the results.

This type of platform is urgently needed because AI systems are completely different from traditional applications. These can generate a wider range of unpredictable responses based on user input, and are more difficult to test before safely releasing. Arato’s platform gives organizations the peace of mind of an additional layer of validation that helps them understand how new AI applications actually work and ensures compliance with the security and regulatory requirements that govern them.

Arato’s assessment tools are designed for pre-deployment and ongoing use after your AI application reaches production. This way, you have continuous visibility into how your AI systems are performing, how they are impacting the user experience, and where improvements are needed.

Co-founder and CEO Shahar Erez said the reality of AI today is that the technology is not yet ready, but organizations are doing it anyway because they see no reason not to. “The question is: how often do they fail, in what circumstances do they fail, and what potential harm can they cause to users and businesses?” he explained.

The challenge for many developers is to ensure that AI applications solve business problems and create real value for users, while minimizing the downsides associated with untested technology. “Arato allows us to systematically measure problems before our customers discover them on their own,” Erez said.

Erez said Arato already has dozens of customers using its tools, including enterprise software providers, e-commerce companies, financial institutions, insurance companies and industrial companies. One of those customers is a global industrial company that has deployed an AI assistant for its field technicians.

Using Arato’s software, validation time for new AI assistant updates has been reduced from three months to a few days. This reduces manual effort by approximately 80% and, with continued use, is expected to save the company approximately $5 million over the next three years.

Mr. Erez co-founded Arato with CTO Hilik Paz. Hilik Paz previously helped found Israeli workforce management software startup Stoke Talent Ltd., which was acquired by Fiverr International Ltd. in 2021 for $95 million. Arato’s third co-founder is Tal Salmona, vice president of research and development, who previously worked with Erez and Paz at Mercury Interactive Inc. and VMware Inc.

TLV Partners Managing Partner Eitan Bek said most companies blindly deploy AI systems into business-critical workflows, with little understanding of how the AI ​​systems will behave in production. “Arato is working on issues that will become increasingly central as AI adoption expands,” he said. “It gives product, engineering, and business teams the evidence they need to know if their AI applications are production-ready.”

Photo: Eyal Tueg