Privacy-focused Venice AI raises $65M at $1 billion valuation

On Wednesday, Venice AI announced it has secured a $65 million Series A funding round—the startup’s first external fundraise—valuing the company at $1 billion, achieving unicorn status (a term for startups valued at $1 billion or more). The investment round was led by crypto-focused venture firm Dragonfly, with participation from Coinbase Ventures and North Island Ventures.

The platform differentiates itself by offering access to more than 200 AI models while maintaining a privacy-first approach. Venice AI routes queries to closed-source models, such as those provided by OpenAI and Anthropic, but does not store any user data on its own systems. All user inputs are encrypted and decrypted client-side, then routed through an external proxy before processing.

This privacy architecture has driven significant user adoption. Venice AI reports having more than 850,000 unique visitors to its website, serving more than 3 million active users, and processing an average of 1.7 million API calls per day. According to CEO Erik Voorhees, the company is already profitable, with annualized run-rate revenues—a projection of yearly earnings based on current performance—of over $70 million.

Voorhees, who previously founded the cryptocurrency exchange ShapeShift and the bitcoin gambling site Satoshi Dice, has a long history of advocating for user privacy. This philosophy shapes Venice AI’s operational stance. When ShapeShift previously operated without requiring user identification, the Wall Street Journal reported that the platform processed millions of suspect funds. At the time, Voorhees defended the approach, stating that he did not believe people should have their identities recorded to catch an occasional criminal.

Voorhees views Venice AI as a neutral tool or platform, comparing its operation to the neutral protocol of Bitcoin. He argues that constant surveillance is dangerous from a safety perspective, asserting that widespread monitoring is far more hazardous than an individual asking a controversial question or doing something considered bad. He also distances the platform’s model from concerns regarding AI psychosis. “We’re optimizing for freedom and actually respecting users as adults, which is, I think, rare these days,” Voorhees said.

To incentivize engagement, Venice AI utilizes two utility tokens. The company launched its VVV token in early January, and in August last year introduced the DIEM token. Users can stake VVV to mint DIEM, which generates $1 worth of AI credits per day. Despite these integrations, Voorhees noted that only about 8% of the company’s users pay with crypto. Instead, he attributes the platform’s recent growth to closing the performance gap with mainstream alternatives like ChatGPT, noting that while the platform was previously far behind what ChatGPT could do, it has now closed that gap to become a compelling alternative.

Why it matters

Venice AI’s unicorn valuation highlights a growing market segment for uncensored AI tools that prioritize user privacy and autonomy, challenging the standard safety-first approach adopted by major AI labs.