Venice AI has become a unicorn after raising $65 million in Series A funding, underscoring growing investor confidence that privacy-first platforms built on open source AI models can compete with proprietary AI services.
Privacy-first AI startup Venice AI has become a unicorn after raising a $65 million Series A funding round at a $1 billion valuation, highlighting growing commercial and investor confidence in open source AI platforms. The company’s first external funding round was led by Dragonfly, with participation from Coinbase Ventures, North Island Ventures and other investors.
Unlike proprietary AI providers, Venice AI is built around hosting more than 200 uncensored open source AI models on its own infrastructure while also routing requests to closed-source models, including those from OpenAI and Anthropic. The company says it self-hosts open models, modifies some system prompts to encourage more open responses without adding restrictions, and positions open source as the foundation of its business.
Privacy is another key differentiator. User inputs are encrypted, queries are routed through an external proxy, no user data is stored on Venice’s systems, and end-to-end encryption is available for selected paid models.
The company has already achieved strong commercial traction, reporting more than 850,000 unique website visitors, over 3 million active users, around 1.7 million API calls daily, and an annualised revenue run rate exceeding $70 million, making it profitable.
CEO Erik Voorhees said, “We’re optimizing for freedom and actually respecting users as adults, which is, I think, rare these days.”
Venice AI plans to use the new funding to purchase GPUs and build its own data centres, reducing reliance on leased computing infrastructure while improving margins. Although it offers crypto-based AI credit tokens, only about 8% of users pay with cryptocurrency, with the company’s growth primarily driven by improving model quality and privacy.
