Venice AI Raises $65M Series A, Valued at $1B

Venice AI raised $65 million in a Series A funding round led by Dragonfly, valuing the company's equity at $1 billion. The round marks Venice's first outside capital and included participation from North Island Ventures, Coinbase Ventures, F-Prime, Archetype, Liquid2 Ventures, Morgan Creek and other investors, the company confirmed.

In return for the $65 million, Series A investors received an 8.98% equity stake, a vesting grant of 1.5 million VVV tokens and warrants to buy an additional 5 million VVV tokens over the next eight years. Exercising the warrants would require roughly $66.5 million, bringing total proceeds to about $131.5 million. The token grant and warrants are locked for one year and then vest linearly over three years.

Venice AI was founded by crypto entrepreneur Erik Voorhees and markets itself as a privacy-focused alternative to mainstream conversational AI. The company reports it does not store user prompts on its systems, encrypts requests before routing them through an external proxy and offers end-to-end encryption for certain models as part of a paid subscription. Venice provides access to more than 200 models, including open-source models it hosts and closed-source models from external providers accessed anonymously through APIs. Users can select models with varying moderation and privacy settings.

The company said it reached 3 million users in April and became profitable in the first quarter. Venice reported an annualized run-rate revenue above $70 million. Voorhees wrote in an X thread that the funding is intended to scale the platform and expand its user base: “We are making Venice a mass market consumer app, an open and unrestricted AI platform for at least a few hundred million people and several billion AI agents. Doing so requires capital.”

Venice plans to use the new capital to build internal compute infrastructure, including its first data center, to reduce reliance on leased GPUs and improve gross margins. The company stated that owning more compute capacity will help meet rising demand and make larger token burn programs feasible. The funds will also be used for market expansion, strategic acquisitions, hiring and customer growth.

The company chose to sell equity rather than tap its token treasury. Voorhees wrote, “We don't want to sell the token.” Venice remains the largest holder of VVV, holding more than 30 million tokens out of a supply above 80 million, and the company and team report they have not sold VVV tokens to date despite the token's price rise this year. Venice said it will continue allocating a portion of revenue to buy back and burn VVV tokens while gradually reducing token emissions.

If investors fully exercise their warrants, token sales would begin about one year from now and would add roughly 6,000 VVV tokens per day to the market, an amount the company estimates at about 0.2% of current daily trading volume. Any warrants not exercised would remain on Venice's balance sheet. Venice also operates a second token, DIEM: users stake VVV to receive sVVV and can lock sVVV to mint DIEM, with each DIEM redeemable for $1 of permanent API credit on the Venice platform.