Venice AI Raises $65 Million Series A at $1 Billion Valuation Led by Dragonfly
Erik Voorhees’ privacy-focused crypto-AI startup, Venice AI, has raised $65 million in a Series A funding round. The round values the company at a $1 billion equity valuation.
Funding Round Details
Dragonfly led the investment, with participation from prominent firms including:
- North Island Ventures
- Coinbase Ventures
- F-Prime
- Archetype
- Liquid2 Ventures
- Morgan Creek
This marks Venice AI’s first external funding round. In exchange for the investment, backers received:
- 8.98% equity stake
- Vesting grant of 1.5 million VVV tokens
- Warrants to buy another 5 million VVV tokens over the next eight years
If the warrants are fully exercised, the total capital raised would reach approximately $131.5 million.
What is Venice AI?
Launched over two years ago, Venice AI offers a private and uncensored alternative to ChatGPT. Key features include:
- No storage of user prompts
- Encrypted requests routed through external proxies
- End-to-end encryption on paid plans
- Access to over 200 AI models (open-source and closed-source)
The platform reached 3 million users in April and became profitable in Q1 while maintaining strong privacy standards. It currently has an annualized revenue run-rate of over $70 million.
Plans for the New Capital
Venice AI will use the funds to:
- Build its own compute infrastructure and first data center
- Reduce reliance on leased GPUs
- Expand into new markets
- Acquire complementary businesses
- Hire talent and grow its user base
The goal is to make Venice AI a mass-market consumer app for hundreds of millions of users and billions of AI agents.
Why Sell Equity Instead of Tokens?
Venice chose to sell equity rather than its treasury VVV tokens. The company remains the largest holder of VVV, owning over 30 million tokens. Neither the company nor the team has sold any VVV tokens to date, even after a 700%+ price increase this year.
Token Strategy Remains Strong
Venice plans to continue buying back and burning VVV tokens using revenue. It also offers a second token called DIEM, which users can mint by staking VVV. Each DIEM provides $1 worth of API credits that never expire.
