Cloudforce Raises $10M In Series A Funding Round

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Cloudforce raised $10 million in Series A funding round led by Owl Ventures, with participation from Microsoft’s M12 fund, to support expansion in secure AI for regulated sectors. The funding highlights growing investor interest in equitable AI platforms, amid rising demand for compliant, private generative AI solutions.

Cloudforce is a Maryland-based AI company specializing in secure, frontier AI solutions for regulated industries such as education, healthcare, and the public sector. Its flagship platform, nebulaONE®, provides private generative AI capabilities, ensuring compliance with standards like HIPAA. The company has been recognized as Microsoft’s 2025 Education Partner of the Year and operates within the Microsoft cloud ecosystem.

The $10 million Series A round was led by Owl Ventures, the world’s largest EdTech-focused venture capital fund, with strategic investment from M12, Microsoft’s venture fund. This investment grants Cloudforce access to Microsoft’s enterprise sales and product teams, enhancing its go to market strategy. The funds will fuel international expansion, hiring increases in 2026, and the development of AI agents tailored to education and healthcare workflows.

This round underscores confidence in Cloudforce’s approach to democratizing safe AI, potentially accelerating adoption in sectors wary of data privacy risks. It may also signal broader trends in AI investment toward regulated applications, with partnerships like Microsoft’s providing a competitive edge.

Cloudforce, headquartered in National Harbor, Maryland, operates as a frontier AI firm dedicated to delivering secure and equitable artificial intelligence solutions tailored for highly regulated environments. Founded with a focus on bridging the gap between advanced AI technologies and sectors constrained by compliance requirements, the company has positioned itself as a key player in the Microsoft cloud ecosystem. Its core mission revolves around democratizing access to generative AI while prioritizing safety, equity, and institutional control, ensuring that organizations in education, healthcare, and government can leverage AI without compromising on data security or regulatory adherence. This approach addresses a critical market need, as institutions increasingly seek private AI platforms that mitigate risks associated with public cloud models, such as data leakage or non compliance with standards like HIPAA.

The company’s flagship product, nebulaONE®, exemplifies this mission. It is a secure, institution wide generative AI platform designed for deployment in regulated sectors. Currently utilized by more than three million users across 90 institutions worldwide, including major universities in North America and Europe, nebulaONE® enables weekly onboarding of new organizations. The platform’s recent HIPAA certification has facilitated expansion into healthcare, with initial customers onboarded in 2025. NebulaONE® integrates seamlessly with Microsoft technologies, offering features like private AI instances that maintain data sovereignty and equitable access. This has contributed to Cloudforce’s rapid growth, with deployments planned for hundreds more in 2026. Beyond education, its primary market, the platform is scaling into healthcare and the broader public sector, where demand for compliant AI is accelerating due to evolving regulations and the need for cost effective, user friendly tools.

Cloudforce announced the closure of its $10 million Series A funding round, marking a significant milestone in its trajectory. Led by Owl Ventures, the largest venture capital fund dedicated to education technology with over $2.2 billion in committed capital across seven funds, the round also featured strategic participation from M12, Microsoft’s venture fund. This investment not only provides capital but also unlocks direct access to Microsoft’s enterprise sales organization and product teams, reinforcing Cloudforce’s alignment with the tech giant. The funding arrives amid a surge in demand for regulated AI, as institutions grapple with integrating generative AI while managing compliance, data privacy, and cost controls.

The use of proceeds is strategically outlined to propel Cloudforce’s next phase of growth. Primarily, the capital will accelerate international expansion, enabling the company to reach new markets beyond its current strongholds in North America and Europe. Hiring will ramp up significantly in 2026, focusing on talent in engineering, sales, and vertical specific expertise to support scaling operations. A key initiative involves launching new AI agents customized for education and healthcare workflows, such as tools for personalized learning or patient data analysis, which could enhance user engagement and outcomes in these sectors. This vertical focus aligns with broader industry trends, where AI adoption in regulated fields is projected to grow rapidly, driven by needs for efficiency and equity.

From a market perspective, Cloudforce’s funding reflects the evolving landscape of AI investments. The AI sector, particularly in regulated industries, is witnessing heightened interest as organizations move beyond hype to practical implementations. Demand for secure AI platforms has intensified, with education and healthcare facing unique challenges like equitable access for underserved populations and stringent data protections. Owl Ventures’ involvement underscores this, as the firm specializes in AI driven learning solutions that promote access and equity, with a portfolio impacting over 634 million users in 241 countries. Their investments span companies like Accelerate Learning and Dreambox, emphasizing mission driven innovations. Similarly, M12’s participation highlights Microsoft’s commitment to fostering AI ecosystems, with a strategy focused on deep tech, cloud infrastructure, and enterprise applications that align with their broader corporate goals. M12 invests in early stage companies to create synergistic value, often providing portfolio firms with customer connections and technological resources.

While the exact valuation of Cloudforce post funding remains undisclosed in public sources, the $10 million raise at the Series A stage suggests a strong pre money valuation reflective of its user base and growth metrics. Comparable companies in the EdTech and HealthTech AI space, such as those in Owl Ventures’ portfolio, often see valuations in the tens to hundreds of millions at similar stages, depending on traction and market potential. Cloudforce’s HIPAA certification and Microsoft partnership likely bolster its valuation prospects, positioning it favorably against competitors like 3Cloud or other secure AI providers.

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Social media and industry reactions to the funding have been positive, with announcements emphasizing the round’s role in advancing safe AI. Posts on platforms like X (formerly Twitter) highlight excitement around Cloudforce’s focus on healthcare compliance and educational equity, with comments noting the investment’s implications for regulated AI deployment. For instance, discussions point to nebulaONE®’s potential in HIPAA-compliant environments, signaling broader adoption in sensitive sectors. This buzz aligns with analyst views that the funding will catalyze Cloudforce’s transformation of AI applications in education and healthcare.

Looking ahead, Cloudforce’s trajectory appears promising but not without challenges. The company must navigate competitive pressures from larger AI players and evolving regulations, such as potential updates to data privacy laws. However, with strategic investors like Owl Ventures and M12, Cloudforce is well equipped to execute its plans. Future milestones may include further certifications, partnerships, and product launches, potentially leading to subsequent funding rounds or acquisitions. Overall, this Series A round not only validates Cloudforce’s model but also contributes to the broader discourse on responsible AI deployment in critical sectors.

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