Recraft’s Mysterious AI Model Surpasses DALL-E, Midjourney; Startup Raises $30M Series B Led by Accel

A stealth AI model developed by Recraft, a San Francisco-based startup, outperformed industry giants DALL-E and Midjourney on a respected benchmark last year. The company has now secured $30 million in a Series B funding round led by Accel, with additional investments from Khosla Ventures and Madrona. Previously, Recraft raised $12 million in a Series A round led by Khosla in 2024. The startup currently boasts over 4 million users and has surpassed $5 million in annual recurring revenue (ARR). The standout AI model, codenamed "red_panda," made headlines when it topped the Artificial Analysis benchmark. This model, actually Recraft's third version (V3), gained its nickname because early users frequently generated images of the adorable mammal. According to Anna Veronika Dorogush, Recraft’s founder and CEO, the company builds its models from the ground up to compete with well-known image generators such as Midjourney, Adobe Firefly, Stable Diffusion, and Black Forest Labs. What sets Recraft apart is its focus on generating high-quality images tailored for brand-specific needs. This includes placing logos precisely where required and creating marketing materials like brochures and posters that seamlessly adhere to existing brand guidelines. Dorogush highlighted that existing image models often struggle with these tasks, making Recraft a formidable competitor not only in the AI space but also in the realm of design tools like Canva, which offers similar AI-driven branding capabilities. Dorogush’s journey to becoming a solo female founder and CEO is as unique as her company's technology. She founded Recraft after extensive experience in machine learning at Yandex, the Russian equivalent of Google, and prior roles at Google and Microsoft. Before diving into AI, Dorogush worked as a professional model while pursuing her degree in mathematics and computer science at a leading Russian university. Although she left the modeling industry, that period taught her valuable lessons about the importance of strategic excellence rather than sheer perseverance. "The biggest lesson from that time was that grinding isn’t everything," Dorogush explained. "When building a company, success hinges on being exceptional in mission-critical areas. For us, that means creating top-tier models. We’ve poured all our efforts into mastering this aspect." This strategic approach has evidently paid off. With significant funding and a growing user base, Recraft is poised to continue pushing the boundaries of AI-generated imagery, particularly in the context of brand-specific applications. The combination of Dorogush’s technical expertise and business acumen positions Recraft to challenge established players and redefine what AI can achieve in the creative industry.