Open-Weight AI Startup Arcee AI Reaches $1 Billion Valuation

WASHINGTON — Arcee AI, a model-training startup founded in 2023, reached a $1 billion pre-money valuation after a Series B funding round of at least $150 million, according to industry sources familiar with the matter.

The round was led by Vista Equity Partners, Cambium Capital, and Emergence Capital. Microsoft’s venture unit M12, AI10 Ventures, Hitachi, IAG, P7, and Wipro also participated.

Arcee AI will use the new capital to develop next-generation open-weight models, support enterprise deployments across Vista Equity Partners’ portfolio companies, and expand its partnership with the U.S. Department of Energy.

The company was initially established by Chief Executive Officer Mark McQuade to focus on model post-training and alignment. McQuade was an early employee at open-source platform Hugging Face before its nearly $13 billion acquisition by Nvidia.

Open-weight architectures give enterprises and government institutions direct access to model parameters. Organizations can deploy state-of-the-art systems on private infrastructure without transferring sensitive data to third-party vendors, unlike the closed-source, API-based models operated by companies such as OpenAI and Anthropic.

McQuade’s startup later pivoted to pre-training foundation models from scratch after Meta Platforms scaled back its push into open-weight development. Meta had previously led domestic open-weight development with its Llama series.

The shift has taken place as American venture capital flows heavily into open-weight artificial intelligence. U.S. technology leaders are seeking to counter Chinese artificial intelligence labs while domestic developers compete to secure a foothold and fill a strategic void left by major U.S. cloud conglomerates.

Chinese developers have moved aggressively in the open-weight space even as Western companies have maintained a dominant position in closed-source proprietary systems. Institutions in Beijing and Hangzhou have released models including DeepSeek and Z.ai’s GLM Flash model.

DeepSeek reported training competitive models for under $6 million in 2025. The releases from DeepSeek and Z.ai have demonstrated high efficiency at a fraction of traditional computing costs.

Arcee AI deployed approximately $20 million, or nearly 70% of its initial $30 million capital base, to train four open-weight models. In early 2026, the company released Trinity Large, a 400-billion-parameter open-weight model.

Trinity Large has demonstrated benchmark performance competitive with Meta’s Llama 3, France’s Mistral, and leading Chinese open-weight architectures.

The funding surge into Arcee AI coincides with sustained private equity and venture capital deployment across artificial intelligence infrastructure, cybersecurity, enterprise software, and energy systems.

In cybersecurity, Exein, a Rome-based developer specializing in AI-powered machinery protection, closed a $270 million funding round led by Headline, with participation from Sofina and Goldman Sachs. Delos Data, a Palo Alto, California-based developer of networking technology for AI data centers, raised $100 million from Matri, Playground, and Socratic Partners.

Liquid Compute, a New York-based marketplace for trading AI compute capacity, raised $15 million in seed funding led by FirstMark and Chemistry. Cupertino, California-based VerifAIX raised $5 million in seed funding led by Endiya Partners and Bluehill VC for its chip-design verification software.

Enterprise AI applications also attracted new capital. Profound, a New York-based developer of AI-search marketing software, completed a $180 million Series D round co-led by Sequoia Capital and Kleiner Perkins. Lightspeed Venture Partners, Khosla Ventures, and South Park Commons continued backing the company.

Seattle-based Nuance Labs secured $50 million in Series A funding led by Lightspeed Venture Partners. The startup is developing models tuned for human expression, with additional participation from Accel, Nvidia, South Park Commons, and Define Ventures.

Jack & Jill, a London-based AI recruiting platform, raised $40 million in a Series A round led by Air Street Capital, with participation from Creandum and Madrona. G5 Labs, a Boston-based AI software development platform, secured $14 million in seed funding led by Pillar VC and Battery Ventures, with support from Omega Venture Partners and Encoded Ventures.

Tel Aviv-based Keewano raised $12 million from Hetz Ventures and Andreessen Horowitz to develop specialized databases for AI agents. Decimal AI, a San Francisco-based technical support platform for software companies, closed a $4 million seed round led by Khosla Ventures and Kearny Jackson.

In financial technology, Miami-based Split Pay secured $125 million across Series A and Series B rounds backed by Khosla Ventures, Thrive Capital, and MetaProp. The platform breaks customer bills into installments.

Thatch, a San Francisco-based employee health-benefits platform, completed a $108 million Series C funding round supported by The General Partnership, Index Ventures, General Catalyst, and Andreessen Horowitz.

Loora, a Tel Aviv-based developer of an AI English-learning application, closed a $22 million Series B round led by Union Tech Ventures, alongside vgames, Emerge, Hearst Ventures, and QP Ventures.

Buywander, a Seattle-based e-commerce auction marketplace for returned goods, raised $21 million in Series A funding led by Madrona Venture Group and Inspired Capital, with participation from Triple Impact Capital and Silence Ventures.

Nara Health, a Chicago-based administrator for personalized health insurance plans, raised $14 million across seed and pre-seed rounds led by Khosla Ventures and Long Journey Ventures. Zurich-based ETFBOOK, an ETF data and analytics provider, secured $13 million led by Expedition Growth Capital and BlackFin Capital Partners.

Rebuild, a New York-based insurance-claims software provider for restoration contractors, raised $13 million from Asymmetric Capital Partners, Gutter Capital, 25madison, Lightbank, and Green Egg Ventures.

Energy and industrial technology companies also raised funds. Branch Energy, a Houston-based developer of utility-scale energy storage for commercial real estate and data centers, raised $33 million in Series B funding led by Piva Capital and Clean Energy Ventures, alongside Active Impact Investments and Whitecap Venture Partners.

Nomos, a Berlin-based energy grid developer, raised €20 million ($23 million) in funding led by Index Ventures. Robocurve, a San Francisco-based startup offering independent testing frameworks for robotic control AI models, raised $10 million in seed funding led by Initialized Capital, with participation from Notable Capital, Decasonic, Y Combinator, and Halcyon Futures.

Private equity investors continued to consolidate healthcare data assets and enterprise tech portfolios. Datavant, a Phoenix-based health data ecosystem, agreed to sell a minority stake to KKR and Neuberger Berman. Financial terms were not disclosed.

RedCloud Capital acquired a majority stake in APS Environmental Group, a Bedford, New Hampshire-based environmental testing, inspection, and abatement service provider. Financial details were withheld.

PSG Equity, a Boston-headquartered growth equity firm, completed fundraising for its third European vehicle at €4.4 billion. The fund will target growth investments in AI-native enterprises and software firms across Europe.

Periscope Equity, a Chicago-based private equity fund, announced the promotion of Eric Hinkle to Partner.