Dragonfly leads $65M Series A for Venice AI at $1B valuation

Dragonfly led a $65 million Series A in Venice AI, the privacy-focused startup founded by bitcoin advocate Erik Voorhees. The funding round, announced July 1, set a $1 billion post-money valuation and is Venice’s first outside equity raise since it launched in 2024.

The round included participation from Coinbase Ventures, North Island Ventures, Archetype, Morgan Creek Digital and Liquid 2 Ventures. Series A investors received 8.98% of the company, a vesting grant of 1.5 million VVV tokens and warrants to purchase up to 5 million additional VVV over eight years. The warrant tokens are locked for one year and then vest over three years. If those warrants are exercised in full, the total capital raised could reach $131.5 million. VVV’s market value rose about 12.8% after the announcement.

Voorhees spent two years building Venice before accepting outside capital. He wrote that the financing structure was designed to align incentives across the company, investors and the token-holding community. He also wrote that Venice aims to “protect private thought and expression from mass surveillance” and to build “an open, permissive platform that respects the sovereignty of its users, both human and automated.”

Venice reports more than 3 million active users, processes roughly 1.3 trillion tokens per month and handles over 1.7 million daily API calls. The company reported it reached profitability in the first quarter of 2026.

The platform encrypts user inputs client-side and does not retain conversations on its servers. Users can choose from more than 200 AI models, including open-source models with fewer content restrictions and closed-source options from providers such as OpenAI and Anthropic. Venice operates a token system 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.

Venice chose to sell equity rather than liquidate treasury tokens to fund growth. Series A investors received both equity and token grants and warrants, a structure Voorhees said would avoid adding immediate token supply while aligning investor and community incentives.

The company plans to use the proceeds to build proprietary data centers to reduce reliance on leased compute and to improve margins, expand its customer base, enter new markets and pursue acquisitions. Venice reported that about 8% of users currently pay with cryptocurrency.

The fundraise comes amid ongoing debate over AI safety, data collection and content moderation. Venice’s model of client-side encryption and minimal data retention differs from competitors that store user data to train and refine models.