Markets
Lightspeed Ventures among crypto VCs invests millions in startup Stability.AI as crypto hype wanes – 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 another sign that cryptocurrency venture capitalists are getting in on the artificial intelligence trend, the list of backers that propelled Stability.AI to its $80 million investment includes big names in the cryptocurrency industry.
According to company documents viewed by DL NewsLightspeed Ventures and Coatue joined a funding round, investing $2.4 million and $4.9 million, respectively.
Speed of light has invested in some of the largest companies in the crypto industry, including Ripple, Solana and Yuga Labs.
Coatue has backed Chainalysis, CertiK, Dapper Labs and other crypto companies. Both investment firms contributed financially to blockchain infrastructure startup Alchemy.
The list of investors is a sign that while AI hype dominates headlines and mountains of money are piling up in Silicon Valley, growth opportunities in the crypto sector are becoming fewer and farther between.
Based in Los Angeles, Stability.AI is best known for Stable diffusiona technological model capable of transforming text messages into images.
Crypto plays no role in its design or operations.
Expanding the focus on venture capital
“Many ‘crypto-only’ funds that have raised significant funds are struggling to deploy funds solely into the crypto market,” said Eylon Aviv, partner at crypto investment firm Collider. DL News. “As a result, they are expanding their scope into adjacent areas, AI being a prime example. »
Join the community to receive our latest stories and updates
Stability.AI hasn’t only attracted crypto-focused funds.
Greycroft Partners invested about $20 million, the document reveals.
And Retspan, a fund backed by Silicon Valley investor and former Facebook executive Sean Parker, has invested nearly $12 million. A representative for Parker declined to comment.
Eric Schmidt is also an investor in Stability.AI, a source close to the former Google CEO confirmed to DL News. AI company touts Schmidt’s support for X this week.
In 2022, Stability.AI raised $101 million at a reported Billion dollar valuation.
The June 25 filing shows that Stability.AI issued nearly 2 million shares for about $51 million.
The company could 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 a year, according to the documents.
VCs are cooling off on crypto
This fundraising marks a shift in focus from the venture capitalist towards AI games 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 such as Stable Diffusion and OpenAI’s ChatGPT application has captured the imagination of investors. OpenAI’s valuation is According to some reports, more than $80 billionaided by a $10 billion investment from Microsoft in 2023.
Lemniscap, a Cayman Islands-based company focused on crypto startups, invested $2.3 million across three entities in Stability.AI, according to separate filings. It also backed Avalanche and Algorand, two layer-1 blockchain networks.
Lemniscap has invested over $66,000 in Stability.AI. via its Lemniscap Blockchain Fund.
Liam Kelly is a DeFi correspondent at DL News. Do you have information about the elections? Contact us at liam@dlnews.com.