Venice AI, the privacy-centric artificial intelligence platform created by cryptocurrency pioneer Erik Voorhees, has closed a $65 million Series A investment round, propelling the startup to unicorn status with a $1 billion valuation, marking its inaugural external capital raise since its May 2024 debut.
The round was led by Dragonfly with participation from Coinbase Ventures, North Island Ventures, F-Prime, Archetype, Liquid2 Ventures, and Morgan Creek. The $65 million investment secured backers an 8.98% equity stake in Venice AI. Investors also received a vesting allocation of 1.5 million Venice (VVV) tokens and warrants to purchase 5 million additional VVV tokens during an eight-year window at approximately $66.5 million. The token allocation and warrants carry a one-year lock-up period, followed by a three-year vesting schedule. Venice chose to sell company equity rather than directly issuing new VVV tokens in the round. The company also maintains a treasury of more than 30 million VVV tokens, none liquidated despite a 700% price surge this year.
Venice AI markets itself as a privacy-respecting alternative to mainstream platforms such as ChatGPT. The platform employs a zero-storage policy for user queries and encrypts all requests before routing them through external proxy servers. When using models from OpenAI, Anthropic, and Google, Venice masks users’ IP addresses and session information, with enhanced privacy features available when using alternative models via the platform.
The company reports a user community of 3.5 million and annualized revenue greater than $70 million. Venice AI said it was profitable in the first quarter of 2026. The capital infusion is being directed toward building Venice’s inaugural data center to gain control over GPU infrastructure, with remaining funds allocated to expanding the customer base, hiring, geographic market penetration, and pursuing strategic acquisitions of synergistic companies. Voorhees described the aim as making Venice a mass-market consumer app for at least a few hundred million people and several billion AI agents.
The VVV token appreciated 6% following the funding announcement. Venice operates a dual-token ecosystem that includes DIEM. Platform users can stake VVV tokens to generate DIEM, with each DIEM token providing $1 worth of API credits for platform usage.
The funding occurs amid growing scrutiny of AI privacy practices. A California class-action lawsuit targeted OpenAI, alleging the company integrated Meta Pixel and Google Analytics into ChatGPT.com, potentially transmitting user information to Meta and Google along with advertising cookies. Earlier in the year, legal professionals cautioned that conversation histories from AI-powered legal-advice tools could be admissible as evidence in court proceedings.
“We are making Venice a mass market consumer app for at least a few hundred million people and several billion AI agents,” Voorhees said.
