Hybridity Secures €2 Million to Revolutionize Regulatory Compliance with AI
Hybridity, a Stockholm-based AI RegTech startup, has successfully raised €2 million (SEK 22 million) to expedite the commercialization of its innovative AI platform, Hy5. This platform is designed to automate compliance with complex EU regulations, including DORA, NIS2, and GDPR.
New Investors Join the Venture
The latest funding round has attracted notable investors such as Henrik Ekelund from BTS Group, Hans Otterling, and Jörgen Bladh, a former member of Northzone. Additionally, the family office Fonos, associated with the Irinarchos family, and Björn Hovstadius, founder of Pagero and a board member of the European Big Data Value Association, have also invested. This new funding brings Hybridity’s total investment to €5 million (SEK 54 million), following a €2.16 million seed round completed in March 2025.
Addressing Compliance Challenges
According to Magnus Sahlgren, CEO of Hybridity, “Compliance is one of the biggest operational barriers to growth in regulated industries, costing European businesses over €150 billion annually.” The Hy5 platform empowers organizations to manage complex regulatory requirements continuously and at scale through AI, minimizing reliance on manual processes. The newly acquired capital will facilitate the next phase of commercialization.
Leadership with Expertise
Sahlgren, who joined Hybridity as CEO on February 1, brings over 20 years of experience in AI research, language technology, and applied machine learning from his previous role as head of research for Language Technologies (NLU) at AI Sweden.
Market Context and Previous Funding
The funding landscape for the AI RegTech sector has been vibrant, with previous rounds reported such as the €30 million Series B funding for Formalize, a Danish RegTech startup, and the €6.8 million Series A funding for Dataships in Dublin. Additionally, in the environmental compliance segment, Germany’s Tanso secured €12 million to enhance its industrial environmental compliance platform.
Hybridity’s Vision and Functionality
Founded in 2023, Hybridity aims to transform the regulatory landscape by automating compliance through its AI-native platform, Hy5. The platform is engineered to perform the heavy lifting in regulatory compliance, allowing organizations to grow faster while remaining continuously compliant and effectively managing risk.
Hy5 can automatically review contracts for compliance with regulations such as CSRD, DORA, NIS2, GDPR, and SFDR. It identifies gaps and inconsistencies, generates action lists, automates CSRD reporting, conducts GAP analyses, and ensures that policy documents are up-to-date. The platform can also create AI-based handbooks from existing governance documents.
Future Potential
Hans Otterling emphasizes the significance of Hybridity’s approach, stating, “Hybridity has developed a technically strong solution for a large and rapidly growing problem.” The combination of deep AI expertise and a focused business strategy positions the company well for international scaling.
Hybridity is backed by a range of tech investors, including Noam Perski, Head of Europe at Palantir, Stefan Lennhammer, Chairman of the Board at Hybridity, and Simon Josefsson, former CTO at Yubico.
