ChatGPT Rival Venice AI Hits $1 Billion Valuation — Here’s What we Know

TLDR

• Venice AI raised $65 million in a Series A round led by Dragonfly, reaching a $1 billion valuation
• Coinbase Ventures, F-Prime, North Island Ventures, and Morgan Creek also participated
• Investors received 8.98% equity, 1.5 million VVV tokens, and warrants for 5 million more tokens
• Venice AI offers access to 200+ AI models with a privacy-first approach, claiming 3.5 million users
• The funding will go toward building Venice’s own data center and expanding its user base

Venice AI, the privacy-focused AI startup founded by crypto entrepreneur Erik Voorhees, has raised $65 million in a Series A funding round. The round values the company at $1 billion, making it a unicorn. It is the company’s first outside capital since it launched in May 2024.

Dragonfly led the round. Other investors include Coinbase Ventures, North Island Ventures, F-Prime, Archetype, Liquid2 Ventures, and Morgan Creek.

What Investors Are Getting

In exchange for the $65 million, investors received an 8.98% equity stake in Venice AI. They also received a vesting grant of 1.5 million Venice (VVV) tokens. On top of that, they hold warrants to buy another 5 million VVV tokens over the next eight years at a cost of around $66.5 million.

Both the token grant and the warrants are locked for one year, then vest over the following three years.

Venice chose to sell equity rather than its own VVV tokens. Voorhees said the company still holds more than 30 million VVV tokens and has not sold any to date, despite the token rising over 700% this year.

Privacy at the Center of the Product

Venice AI positions itself as a private alternative to tools like ChatGPT. The platform does not store user prompts and encrypts requests before routing them through an external proxy.

For models from OpenAI, Anthropic, and Google, Venice hides users’ IP addresses and session data. Higher privacy options are available for other models on the platform.

The platform claims 3.5 million users and reported annualized revenues of over $70 million. Venice said it became profitable in Q1 2026.

The fundraise comes as AI privacy concerns have grown. A class-action lawsuit filed in California accused OpenAI of embedding Meta Pixel and Google Analytics into ChatGPT.com, allegedly sending user data to Meta and Google alongside ad cookies.

Earlier this year, lawyers warned that chat logs from AI legal consultations could be used against users in court.

How the Money Will Be Used

Voorhees said the funding will go toward building Venice’s first data center so the company can own its GPU infrastructure rather than lease it.

The rest will be used to grow the customer base, hire staff, enter new markets, and acquire complementary businesses.

The company’s VVV token rose 6% on the day of the announcement.

Venice also has a second token, DIEM. Users can stake VVV to mint DIEM, which provides $1 in API credit on the platform.

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