In order to build its enterprise-grade federated AI platform, Rhino Federated Computing, a Boston-based business that creates AI collaboration solutions for regulated sectors, has raised $15 million in series A funding.
In addition to contributions from current investors LionBird, Fusion Fund, Arkin Digital Health, Qiming Venture Partners USA, and Telus Global Ventures, AlleyCorp spearheaded the investment round. Gaingels, Frank Sica, and Wilson’s Bird Capital were among the new investors who took part.
Since its inception, Rhino has raised more than US$30 million, including this capital. The startup, which specializes in federated AI, was founded in 2020 by serial entrepreneur Yuval Baror and Dr. Ittai Dayan, a former AI leader at Mass General Brigham.
With the help of this technology, businesses may work together to construct AI models without disclosing private information. Currently, the company has about 20 employees, half of which are situated in Israel.
Food for thought
Federated AI tackles important regulatory issues in sectors with high compliance.
Data security, data quality, algorithm validation, accountability, and ethics are the five main regulatory concerns in healthcare AI that Rhino’s focus on federated AI directly solves.
Given that regulatory agencies throughout the world are closely examining AI applications in delicate industries like healthcare, where patient data protection is still of utmost importance, this strategy is especially pertinent.
Federated learning solves a fundamental issue with current legal frameworks by letting AI come to the data rather than transferring sensitive data across institutional borders, which gives regulated industries like healthcare and finance a compliance edge.
The EU’s proposed AI Act, which seeks to classify systems by risk level and guarantee transparency—requirements that traditional centralized AI models find difficult to achieve in highly regulated environments—highlights the need of solutions like Rhino’s.
Rhino’s investment is part of a larger wave of specialist AI investments
Even while Rhino’s US$15 million series A is noteworthy, it only makes up a small portion of the over US$5 billion that AI startups raised in the first quarter of 2025.
While other specialized AI startups like CAST AI (US$108M) and Perplexity AI (US$500M) have garnered far larger investments, the company’s US$30 million overall funding puts it in the mid-tier of recent AI fundraising rounds.
With AI startups accounting for approximately 33% of worldwide venture capital funding in 2024, or roughly US$120 billion, investor trust in AI is still incredibly high.
Other recent specialized fundraising, such as Latent Labs’ US$50M for AI-driven protein design and Sola Security’s US$30M for cybersecurity automation, indicate that investors are becoming more interested in AI solutions that target certain sector concerns.
Given that governments around the world have made significant investments in AI initiatives—with nations like France dedicating €1.5 billion and the UK pledging £300 million for AI research—Rhino’s success in securing this funding demonstrates that investors recognize the expanding market for compliance-focused AI solutions.