San Francisco radiology startup Epsilon Health has emerged from stealth mode. CEO Rustin Rassoli disclosed exclusively to Axios that the company has completed a $20 million Series A round led by AlleyCorp; the company’s press release and PitchBook record this round and total funding at $27.6 million, with follow-on investors including Uncork Capital, Renegade Partners, SemperVirens, and Jack Altman, who was then a managing partner at Alt Capital.

Epsilon does not create single-disease or single-modality plugins but aims to become the radiology practice itself. The company contracts licensed radiologists and embeds its self-developed models into the image reading and reporting process, with reports signed by doctors sent back to referring parties and patients. Rassoli, who studied mathematics and computer science at the University of Texas at Austin, noted that he witnessed misdiagnoses and delays at his father's imaging clinic, which motivated him to operate a software company, a model group, and a telemedicine association simultaneously, rather than just selling tools to existing groups.

Operational metrics are used to demonstrate that the gap can be filled. The company claims to have served over 250,000 patients, processing more than 2,500 images daily, and expects to review approximately 1% of the daily X-ray volume in the U.S. by 2026; it has taken on more than half of the scanning volume from a major outpatient imaging provider in the U.S. Arjun Karpur, head of machine learning, previously conducted research at Google DeepMind; Chief Medical Officer Roi Bittane was formerly the Chief Medical Officer and Strategic Head at Envision Radiology, described as the second-largest radiology group in the U.S. with over 500 physicians.

The funds will be used for expansion rather than a single-point model competition. Fierce Healthcare reports that this round will be used for market expansion, hiring, increasing clinical collaborations, and infrastructure. Jack Altman commented on the rapid growth from zero to processing thousands of exams daily in less than 10 months, stating that this structure of "becoming the practice itself" will serve as a blueprint for future healthcare delivery. The industry context includes a labor shortage in U.S. radiology: discussions often cite about 19,000 active radiologists, half of whom are nearing retirement, and a projected need for about 30,000 doctors before 2030; the annual scanning volume in the U.S. is estimated at around 700 million scans.

Unlike products like Aidoc that alert based on lesions, Epsilon keeps medical liability, remote signing, and proprietary real case closed loops within the same entity. Doctors generate reports from home, and models iterate based on doctor feedback, with data remaining within the practice. PitchBook marks it as an early-stage company founded in 2024, with employee numbers still in single digits, having completed a seed round in March 2026 and the Series A round on September 10. Axios places this transaction in the investment trend of "radiology still being the most mature scenario for medical AI payments."

The market mechanism is the buying and selling of capacity, not pure software licensing. Buyers are outpatient imaging chains and referral networks that lack overnight image turnaround speed and scalable physician hours; sellers are traditional radiology groups with hourly labor costs and backlog queues. Funding comes from early-stage funds in New York and cross-industry tech investors into an entity that bundles reading services, model weights, and case data together. Beneficiaries are large outpatient providers that can hand over half their scanning volume for faster reports, and contracted physicians whose capacity is amplified by models; pressured parties are AI vendors that only sell single-lesion software and cannot obtain a complete real report closed loop, as well as traditional groups that cannot scale hiring at the same speed. The event-driven aspect comes from the first round pricing after the stealth period, rather than new drugs or new reimbursement codes.

The aging U.S. radiology workforce and the continuous rise in scanning volume make "who owns the signing authority and data closed loop" a variable that monetizes earlier than "who scores higher." Epsilon has turned this variable into an A round asset priced by AlleyCorp.

Source: Public information