Arato, an Israeli startup developing software to test and evaluate artificial intelligence applications, has raised 10 million dollars in seed funding.
The round was led by TLV Partners and included participation from Jibe Ventures, Andreessen Horowitz partner and former VMware CEO Raghu Raghuram, and former Intuit CTO Marianna Tessel.
Arato team. The company employs 23 people, all based in Israel
(Photo: Eyal Toueg)
Founded in 2024, Arato has developed a platform that simulates user interactions with AI applications to help organizations identify potential failures before systems are deployed. The platform generates thousands of simulated scenarios across text, voice, images and business data, then analyzes the results to identify recurring issues, assess risks and highlight areas requiring improvement.
Unlike traditional software, AI systems can produce a wide range of unpredictable responses depending on user input, making them more difficult to test before release. Arato says its platform is designed to provide an additional validation layer by helping organizations understand how AI applications are likely to perform in real-world use and whether they meet business, regulatory and security requirements.
The company says its customers include enterprise software providers, e-commerce companies, financial institutions, insurers and industrial businesses that incorporate AI into core operations.
In one example, Arato said a global industrial company using an AI assistant for field technicians reduced the time required to validate new software releases from roughly three months to a significantly shorter process, cutting manual effort by about 80% and generating an estimated 5 million dollars in savings over three years. The company did not identify the customer.
Arato was founded by CEO Shahar Erez, CTO Hilik Paz and Vice President of Research and Development Tal Salmona. The founders previously worked together at Mercury Interactive and VMware. Erez and Paz also co-founded Stoke, a workforce management platform acquired by Fiverr in 2021 for 95 million dollars.
The company employs 23 people, all based in Israel.
"Many organizations are deploying AI without knowing how these systems will perform in production," Erez said. "The challenge is not eliminating every mistake, but understanding where failures are likely to occur, how serious they may be and how they could affect users and the business."
TLV Partners Managing Partner Eitan Bek said the firm invested because it believes organizations will increasingly need tools to evaluate AI systems before they are deployed in business-critical environments.
First published: 15:29, 06.29.26