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 psychosi