**USA**: Reducto, a startup specialising in AI-driven document parsing, has raised $24.5 million in Series A funding led by Benchmark. Founded in 2023 and backed by Y Combinator, the firm uses Vision Language Models and OCR technology to transform unstructured data for leading tech firms, expanding its platform capabilities.
Reducto, a startup specialising in document parsing using advanced artificial intelligence technologies, has secured $24.5 million in Series A funding as of 27 April 2025. The company, founded in 2023 and backed by Y Combinator, employs a blend of traditional computer vision techniques alongside newer Vision Language Models (VLMs) to transform complex documents into precise inputs suitable for large language models (LLMs).
This innovative approach has positioned Reducto as a key player for AI teams across thousands of firms, including notable names such as Scale AI and prominent FAANG companies. The cofounders and MIT alumni, Adit Abraham and Raunak Chowdhuri, have emphasised their ambition to establish Reducto as the definitive platform for end-to-end management of unstructured data.
The fresh capital infusion was led by Benchmark, with further investment from existing backers including First Round Capital, BoxGroup, and Y Combinator, bringing Reducto’s total funding to $33 million. This funding will support Reducto’s expansion of its platform capabilities, which currently encompass document splitting, intelligent classification, and precise structured data extraction. The company plans to integrate these features into a single coherent system to enable enterprises to build accurate data processing pipelines.
Among the latest technological advancements introduced by Reducto are a new agentic Optical Character Recognition (OCR) framework and smart cost-saving measures. The agentic OCR framework employs a multi-pass VLM approach that automatically reviews and corrects outputs, simulating the effect of human oversight and enhancing accuracy. The cost-saving features optimise processing for simpler document pages, improving efficiency.
Reducto’s services cover a broad range of industries including finance, healthcare, technology, and legal sectors. To date, the company has processed over 250 million pages of documents, addressing critical challenges faced by AI teams in parsing unstructured data. The startup’s clientele features Airtable, Scale AI, Vanta, and several Fortune 25 corporations, all utilising Reducto’s platform to manage their document workflows with confidence and security.
Adit Abraham, cofounder and CEO of Reducto, brings experience from his previous roles at Google, BlinkAI, and the MIT Media Lab. His cofounder, Raunak Chowdhuri, formerly a machine learning researcher at MIT Driverless and the MIT Research Laboratory, contributes deep expertise in AI and machine learning.
According to the company’s statements on LinkedIn, Reducto is rapidly becoming foundational infrastructure for the next generation of AI applications, underpinning how organisations handle unstructured document data at scale. The American Bazaar is reporting on these developments, highlighting Reducto’s rapid rise and technological innovations within the AI and document processing sectors.
Source: Noah Wire Services
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