Small language model (SLM) deployment platform Arcee AI raised USD 24 million in a Series A funding round led by Emergence Capital, with participation from other investors remaining undisclosed. In addition to the round, the company announced the launch of Arcee Cloud, a hosted SaaS version of its platform.

The funds will be used to scale the company’s solutions to a wider customer base via its new cloud platform. 

Arcee Cloud is a SaaS offering that enterprises can utilize to train or merge language models. The company also noted that it has USD 2 million in revenue and aims for profitability by early 2025.

Arcee AI specializes in developing domain-specific language models for enterprises, enabling them to create specialized AI solutions. A key feature of Arcee’s approach is model merging, combining multiple AI models into a single, efficient model without increasing size. Users can control the weight and density of the merged models, tailoring them to outperform larger, general models in specific domains.

Analyst QuickTake: The round underscores investor confidence in Arcee AI, aided by the company’s disclosure of generating USD 2 million in revenue and its plan to achieve profitability by 2025. Further, the round follows Arcee AI’s USD 5.5 million venture funding round in January 2024 , where proceeds were earmarked to expand its workforce, build the platform, and enter new markets.