Crypto VC Dragonfly leads Venice.ai's first outside funding, valuing the two-year-old privacy AI startup at $1 billion. The round includes Coinbase Ventures and Archetype.
Venice.ai, a two-year-old startup that markets itself as a privacy-first alternative to mainstream AI platforms, raised $65 million in its first outside funding round, according to GeekWire. The Series A values the company at $1 billion.
The round was led by Dragonfly, a firm known for crypto investments. Participants included North Island Ventures, Coinbase Ventures, Archetype, Morgan Creek, Liquid2 Ventures and Founders' Co-op. Venice.ai is based in Sheridan, Wyoming.
The $1 billion valuation is notable for a company that operated without venture capital since its founding. Dragonfly's involvement signals that crypto venture firms see AI infrastructure as a natural extension of their bets on decentralized, user-controlled computing. The pitch: AI tools that do not rely on centralized data harvesting.
Venice.ai did not disclose revenue or user numbers. The company plans to spend the proceeds on engineering hires and infrastructure scaling.
The round lands at a time when venture funding for AI startups remains elevated, though valuations have grown more selective. A startup reaching a $1 billion cap without prior equity raises suggests strong investor conviction in the privacy angle. Wyoming's corporate-friendly legal environment, including its DAO and crypto regulations, may have factored into the choice of headquarters.
For the crypto venture world, the deal connects two themes: the push for user-owned data and the demand for AI models that run locally or on permissionless networks. Dragonfly's portfolio spans both categories. Backing Venice.ai lets it test whether the privacy-first AI model can gain traction against incumbents like OpenAI or Google.
The broader question is whether a privacy-focused AI company can build a sufficiently large user base to justify a unicorn valuation. Venice.ai will need to convert curiosity into recurring usage while fending off similar pitches from other startups and bigger tech firms adding privacy features. The $65 million gives it runway to prove that out.
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