Venice AI Becomes a Unicorn with $65M Series A as Its Privacy-First AI Platform Takes Off

Concerns over the impact of AI chatbots on mental health, personal safety, harassment, and disinformation have forced AI developers to implement safeguards to better control how and what their AI models are allowed to respond or do.

But concerns and worries can’t erode demand. AI offers a lot of promise, and people don’t want a faceless tech company to restrict their access to that potential. And if they can preserve their privacy while they use AI models however they want, why not?

Venice AI, which offers access to more than 200 AI models while allowing users to retain their privacy, is raking it in thanks to that demand. Just two years in, the company already has more than 850,000 unique visitors to its website, and serves more than 3 million active users and an average of 1.7 million API calls per day.

The startup hosts “uncensored,” open source models on its own data centers, and routes queries to closed-source models, such as those by OpenAI or Anthropic. All user input is encrypted and unencrypted client-side, and routed through an external proxy before it is processed and returned, with no data stored on Venice’s own systems. It also provides end-to-end encryption on some models, though you have to pay for a subscription to get that feature.

The company is already profitable, with annualized run-rate revenues of over $70 million, its CEO Erik Voorhees (pictured above, in the center) told TechCrunch during an exclusive interview.

Understandably, investors have flocked to get a piece of that traction. Venice AI on Wednesday said it had raised a $65 million Series A at a $1 billion valuation, its first external fundraise. The round was led by crypto-focused venture firm Dragonfly, with participation from Coinbase Ventures, North Island Ventures, and others.

The overlap between Voorhees, Venice’s focus on privacy, and its new crypto investors is hard to miss, especially given the CEO’s background and past work. An early bitcoin advocate, Voorhees has founded a few crypto companies, including bitcoin gambling site Satoshi Dice and cryptocurrency exchange ShapeShift, and has long advocated in favor of preserving users’ privacy.

In fact, when a Wall Street Journal investigation accused ShapeShift, which initially didn’t require its users to identify themselves, of processing millions of suspect funds, Voorhees reportedly said: “I don’t think people should have their identity recorded to catch an occasional criminal.”

He struck a similar note when asked how Venice AI thinks about offering access to AI models in light of recent cases of AI psychosis and resulting harm, saying his team treats their service as a “neutral tool or a neutral platform.”

“This is the same principle that you have in Bitcoin, where Bitcoin, as a neutral protocol, works the same way for all people,” he said. “I think it’s actually quite dangerous from a safety perspective, for the world to enter this next phase and have everyone be constantly watched. To me that is actually much more dangerous than any particular person asking a controversial question or something that might be considered bad.”

There’s a considerable focus on giving users agency, too. Users can freely choose from AI models that can generate text, images, audio, and video — all of which vary in their performance, quality, and the amount of censorship applied. The website prominently features several AI “characters” that you can customize and chat with, and the company proudly states it offers an “uncensored” experience.

“We’re optimizing for freedom and actually respecting users as adults, which is, I think, rare these days,” Voorhees said.

The founder said Venice also works on some open models’ system prompts to instruct them to answer more openly, though it doesn’t add any restrictions to the models.

Unsurprisingly, there are two crypto tokens associated with the effort. Venice launched a token called “VVV” in early January, in a bid to attract users, Voorhees said, and in August last year added another, called “DIEM.” Users can buy VVV and then stake it to mint DIEM, which generates $1 worth of AI credits per day that you can spend on Venice. However, Voorhees said only about 8% of the company’s users pay with crypto.

The founder credited the company’s growth to the good performance of the crypto tokens, though he said the strongest driver was getting close to feature parity with ChatGPT. “When we launched, we were very far away from what ChatGPT could do, but people would use us because it was private. And today, we’re very close to what ChatGPT can do […] so as we’ve closed that gap, it’s become an increasingly compelling alternative,” he said.

Looking forward, Venice AI wants to use the fresh cash to start buying GPUs and building its own data centers so it can stop leasing GPUs and increase its gross margins.

Topics

AI, ai censorship, Crypto, Dragonfly, erik voorhees, Exclusive, Fundraising, generative ai privacy concerns, Venice AI

When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.

Ram Iyer

Editor

Ram is a financial and tech reporter and editor. He covered North American and European M&A, equity, regulatory news and debt markets at Reuters and Acuris Global, and has also written about travel, tourism, entertainment and books.

You can contact or verify outreach from Ram by emailing ram.iyer@techcrunch.com.

View Bio November 4 Boston

Last chance to save up to $190 on TechCrunch Founder Summit. Join 1,000+ founders and VCs at all stages for real-world scaling insights and connections that move the needle.

Savings end June 26, 11:59 p.m. PT.

REGISTER NOW

Most Popular

• Chevy built an all-American EV truck — why is nobody buying it?
  

  • Tim De Chant

• Mark Zuckerberg tells staff that AI agents haven’t progressed as quickly as he’d hoped
  

  • Lucas Ropek

• Jersey Mike’s IPO illustrates how bad the AI hype has become
  

  • Julie Bort

• After $18B IPO, Bending Spoons founder says success comes from minimizing luck
  

  • Anna Heim

• The ‘Father of the Internet’ is finally retiring
  

  • Tim Fernholz

• OpenClaw is finally available on Android and iOS
  

  • Lucas Ropek

• Flipper Device’s new Busy Bar is a customizable display for productivity
  

  • Ivan Mehta