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Lightspeed Ventures Among Crypto VCs Racking Up Millions in Startup Stability.AI as Crypto Hype Declines – DL News
- Crypto investors Coatue and Lightspeed Ventures have invested over $7.3 million in Stability.
- Company documents show the new CEO will earn $500,000 a year for four years.
In yet another sign that crypto venture capitalists are capitalizing on the artificial intelligence trend, the list of backers that propelled Stability.AI to its $80 million investment includes big names in the crypto industry.
According to company documents seen by DL NewsLightspeed Ventures and Coatue joined a fundraising round, investing $2.4 million and $4.9 million, respectively.
Speed of light has invested in some of the biggest companies in the crypto industry, including Ripple, Solana, and Yuga Labs. coat supported Chainalysis, CertiK, Dapper Labs and other crypto companies. Both investment firms have contributed funds to blockchain infrastructure startup Alchemy.
The list of investors is a sign that as AI hype makes headlines and Silicon Valley piles of cash, growth-stage opportunities in the crypto industry are getting smaller and smaller.
Based in Los Angeles, Stability.AI is best known for Stable diffusiona technology model that can transform text prompts into images. Encryption plays no role in its design or operations.
Expanding VC Focus
“Many ‘crypto-only’ funds that have raised large funds are finding it challenging to deploy funds exclusively in the crypto market,” said Eylon Aviv, partner at crypto investment firm Collider. DL News. “As a result, they are expanding their focus into adjacent fields, AI being a prime example.”
Stability.AI hasn’t just attracted crypto-focused funds.
Greycroft Partners invested about $20 million, the filing revealed. And Retspan, a fund backed by Silicon Valley investor and former Facebook executive Sean Parker, invested nearly $12 million. A representative for Parker declined to comment.
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Eric Schmidt is also among the investors in Stability.AIa source close to the former Google CEO confirmed to DL News. The artificial intelligence company praised Schmidt’s support for X this week.
In 2022, Stability.AI raised $101 million in a reported $1 billion valuation.
The document dated June 25 shows that Stability.AI issued nearly 2 million shares for approximately $51 million. The company can sell about 3 million more shares for $29 million.
As part of the financing, Prem Akkaraju was appointed CEO for four years. He will earn a base salary of $500,000 per year, according to the documents.
VCs cool on crypto
The round signals a shift in VC focus toward AI gaming and away from blockchain technology startups.
Stability.AI has 270,000 users on its Discord server and has created over 400 million images. It can also create audio and video based on user instructions.
The arrival of applications like Stable Diffusion and OpenAI’s ChatGPT application has captured investors’ imaginations. OpenAI assessment is reportedly over $80 billionhelped by a $10 billion investment from Microsoft in 2023.
Lemniscap, a Cayman Islands-based company specializing in crypto startups, has invested $2.3 million across three entities in Stability.AI, according to separate filings. It also supported Avalanche and Algorand, both layer 1 blockchain networks.
Lemniscap has invested over $66,000 in Stability.AI. through its Lemniscap Blockchain Fund.
Liam Kelly is DeFi correspondent at DL News. Do you have any tips about the election? Get in touch at liam@dlnews.com.