Dragonfly Leads $65M Bet on Erik Voorhees' Venice AI as Startup Reaches Unicorn Status

Venice AI, the privacy-focused artificial intelligence (AI) platform founded by bitcoin advocate Erik Voorhees, closed a $65 million Series A round at a $1 billion post-money valuation.

Key Takeaways:

• • Dragonfly led Venice AI’s $65 million Series A, valuing the company at $1 billion.
• • Venice hit 3 million users and turned profitable in Q1 2026 before raising capital.
• • Investors got 8.98% equity plus VVV warrants exercisable over eight years.

Crypto venture firm Dragonfly led the round. Coinbase Ventures, North Island Ventures, Archetype, Morgan Creek Digital, and Liquid 2 Ventures also participated. The July 1 announcement marks Venice’s first outside equity raise since launching in 2024.

Voorhees Builds Before He Borrows

Voorhees spent two years building Venice before taking outside money. The platform now counts more than 3 million active users. It processes 1.3 trillion tokens per month and handles over 1.7 million daily API calls. Venice turned profitable in the first quarter of 2026, a rare outcome in an industry where many AI firms still burn cash.

Venice positions itself against mainstream chatbots that log user prompts and store conversation history. The platform encrypts inputs client-side and does not retain conversations on its servers. Users can choose among more than 200 AI models, including open-source options with fewer content restrictions alongside closed-source models from providers like OpenAI and Anthropic.

Investors Skip the Token, Take Equity Instead

Venice runs its own token economy built around VVV and DIEM. Users stake VVV to mint DIEM, which generates daily AI credits. The company has burned roughly 42% of VVV’s circulating supply and holds 30 million of the 80 million total tokens in its treasury.

Rather than sell treasury tokens to raise capital, Venice chose equity. Series A investors received 8.98% of the company, a vesting grant of 1.5 million VVV, and warrants to purchase up to 5 million additional VVV over eight years. If investors exercise those warrants in full, total capital raised could reach $131.5 million.

The warrant tokens stay locked for a year, then unlock over three additional years. Voorhees said the structure aligns incentives across the company, investors, and the token-holding community without flooding the market with fresh supply. VVV jumped 12.8% higher following the Venice AI fundraise news.

Voorhees Points Proceeds at Owned Infrastructure

Venice plans to use the funds to build proprietary data centers, reducing its reliance on leased compute and improving margins. The company also intends to expand its customer base, enter new markets, and pursue acquisitions.

Voorhees framed the capital raise in constitutional terms, describing Venice as protecting private thought and expression from mass surveillance. He wrote that the company aims to build what he called an open, permissive platform that respects the sovereignty of its users, both human and automated.

Currently, only about 8% of Venice users pay with cryptocurrency, according to the company. That figure suggests the platform’s growth increasingly comes from mainstream users rather than crypto-native early adopters.

The raise arrives amid ongoing debate over AI safety, censorship, and data collection practices across the industry. Venice’s approach, betting on user privacy and minimal data retention, stands apart from competitors that rely on stored user data to train and refine their models.