Stability AI Secures New Funding and Leadership After Founder’s Exit Business

Stability AI Secures New Funding and Leadership After Founder’s Exit

Author's avatar Kinslee Nivi

Time icon June 25, 2024   | Last Updated: June 25, 2024 at 6:42 PM

Stability AI, a generative AI startup facing financial challenges, has announced a leadership shakeup and secured $80 million in fresh funding. This news comes several months after the departure of founder and CEO Emad Mostaque.

New Leadership and Funding Boost

The company named Prem Akkaraju, a veteran in the visual effects industry and former head of Weta Digital, as its new CEO. Akkaraju has also invested in Stability AI, demonstrating his confidence in the company’s future.

Stability AI has also secured investments from Coatue Management, Lightspeed Venture Partners, and former Google CEO Eric Schmidt. This new funding round will provide much-needed resources for the company to continue its development.

Strengthening the Board

Stability AI bolstered its board of directors with several high-profile appointments. Sean Parker, former Facebook President, will serve as the board’s executive chairman. Additionally, Greycroft cofounder Dana Settle, Coatue Management General Partner Colin Bryant, and Akkaraju himself have joined the board.

Past Challenges and Future Prospects

In 2022, Stability AI raised $101 million at a $1 billion valuation. However, the company struggled to attract further investment due to its lack of a clear business model. Mostaque’s departure in March 2024 further compounded these difficulties, leading to staff layoffs.

With new leadership, funding, and a strengthened board, Stability AI appears to be setting a course for a more stable future. The company’s AI image-generation tool rivals those developed by tech giants like Google and OpenAI, and its capabilities extend to audio and video creation as well. Investors are clearly betting on Stability AI’s potential to develop a successful business model and solidify its position in the competitive AI landscape.