Private AI: Venice.ai, led by crypto vet Erik Voorhees and Seattle’s Jesse Proudman, raises $65M
Venice.ai, a privacy-focused AI startup with strong Seattle ties, has raised $65 million in its first outside funding, valuing the 2-year-old company at $1 billion.
The company positions itself as a private and unrestricted alternative to standard AI services, offering access to a range of open source and commercial AI models. Venice says it does not log or store user commands and responses on its servers, saving conversations on people’s devices. It also removes many of the content filters built into competing tools.
The Series A round, announced Wednesday morning, was led by Dragonfly, a crypto-focused investment firm, with participation from North Island Ventures, Coinbase Ventures, Archetype, Morgan Creek, Liquid2 Ventures and Seattle-based Founders’ Co-op.
The company was founded in 2024 by crypto entrepreneur Erik Voorhees, its CEO, who runs the company from San Francisco. Voorhees founded the crypto exchange ShapeShift and has long opposed heavy government regulation of cryptocurrency.
Seattle tech veteran and serial entrepreneur Jesse Proudman is Venice’s president, CTO and co-founder. The two met as classmates at the University of Puget Sound in Tacoma.
“We want Venice to be thought of in the consumer space on the same terms as ChatGPT or Anthropic,” Proudman said in an interview. “We want people to open their phones and have our app sitting next to those apps.”
The privacy case comes from how people are starting to use AI. As chatbots become go-to tools for critical issues — medical questions, legal issues, job interviews, relationship advice — users provide deep insights that accumulate on the databases of companies like OpenAI and Anthropic.
That data, says Proudman, is only as safe as the company that holds it.
“It only takes one breach, one disgruntled employee using that data, one government subpoena, one change in government policy — and all that data is gone from you,” he said. “It could be health records, it could be legal questions, it could be job interviews, it could be relationship advice.”
Venice’s answer is that there is no central trove to breach or summon first.
Marketing AI with fewer limitations can make Venice more useful in some cases, but it also raises questions of abuse that lead mainstream services to build on guardrails in the first place. Proudman said Venice includes some safeguards to prevent abuse and illegal activity.
The company, however, bills itself as an “AI security company,” examining users’ thoughts — rather than the content of their alerts — as the biggest risk.
Proudman is based in Seattle, where he has spent more than two decades starting and selling technology companies. He founded cloud-computing company Blue Box, which IBM acquired in 2015, and crypto trading startup Strix Leviathan, which was acquired by hedge fund Parataxis in early 2025. Strix spun off Makara, a crypto investment startup, in 2021, and Betterment acquired Makara the following year.
Proudman spent nearly three years as VP at Betterment, where he started moonlighting in Venice in 2024 — building nights and weekends before going full-time.
Venice says it reached 3 million users in April and was profitable in the first quarter.
“That hockey stick that we keep hearing about, and that I spent 25 years trying to build companies to get, has finally been proven,” said Proudman.
Venice monetizes consumer subscriptions and paid access to its developer API. It also has its own cryptocurrency, the VVV token, which developers can buy and lock to reserve a portion of the company’s computing capacity instead of paying per use.
Proudman said Venice will use the funding to build out its data center infrastructure — which owns the GPUs that power its service instead of renting computing capacity — and to invest in growth as it tries to position itself as a mainstream consumer product.
The company has grown to about 45 employees, up from about 15 a year ago, with six in Seattle. It operates as a remote team and currently does not have an office.
Whether Venice extends its Seattle presence for a long time may depend on state politics. Proudman has publicly opposed Washington’s new 9.9% “billionaire tax” — a federal income tax on household incomes over $1 million that was signed into law in March and will take effect in 2028 — and said he would not stay in government if it happened.
He is pinning his hopes on a campaign to turn off his supporters who are trying to get into the November election.
“I love it here … Seattle is a unique and wonderful place to build a company, and I’ve been building companies here my whole life,” Proudman said. “I want to see us continue to compete with the Bay Area.”
