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A stealthy AI image tool quietly beats big names — and now has US$30M to grow

Recraft, an AI image startup, beats DALL-E and Midjourney on a major benchmark and raises US$30M to expand its branding-focused tool.

You might not have heard of Recraft before, but this small startup has made big waves in the world of AI-generated images. Recraft developed a powerful image model based in San Francisco that quietly outperformed well-known tools like OpenAI’s DALL-E and Midjourney on a respected benchmark last year. Now, the company has raised US$30 million in a Series B funding round, led by Accel.

Other backers include Khosla Ventures and Madrona, who have supported the company before. Recraft also secured US$12 million in a Series A round earlier this year, with Khosla Ventures leading that round, too. The new funding will likely support Recraft’s continued growth, primarily as the startup reports it has already reached over US$5 million in annual recurring revenue and attracted 4 million users.

So, what’s the secret behind Recraft’s sudden rise? It all began with a mysterious model named “red_panda” — also known as Recraft V3 — which topped the Artificial Analysis benchmark in 2024. According to founder and CEO Anna Veronika Dorogush, the quirky name came from the model’s early tendency to generate countless images of red pandas.

Designed with branding in mind

While many AI image generators exist, including Midjourney, Adobe Firefly, and Stable Diffusion, Recraft stands out by focusing on a particular challenge: creating images that work seamlessly for brands. You know how frustrating it can be when you try to make a marketing image and the logo ends up in the wrong place, or the brand colours are off? Recraft solves that.

Its model allows users to place logos exactly where they want and quickly generate materials like brochures or posters that follow brand rules. According to Dorogush, other AI tools often struggle with this. Because of this, Recraft competes with other image models and graphic design tools like Canva, which now also offers AI features.

By building its models from scratch, Recraft has more control over results and can fine-tune them for professional needs. This makes it especially useful for marketing teams needing consistency and quality in every design.

Led by a unique founder

Recraft’s story is also one of determination and a unique experience. Its founder, Anna Veronika Dorogush, stands out in an industry still dominated by male-led companies. She’s a solo female founder and CEO who built her career through years of working in machine learning. Before launching Recraft, Dorogush worked at major tech firms like Google and Microsoft, and spent significant time at Yandex, the Russian equivalent of Google.

But that’s not the whole story. Before entering the tech world, Dorogush worked as a professional fashion model while earning her mathematics and computer science degree from one of Russia’s top universities. Though she left modelling behind, she says it taught her a valuable lesson: working hard isn’t always enough.

“The biggest lesson from that time was that grinding isn’t everything,” Dorogush said. “Now, when building a company, I know that to succeed, we have to be excellent at what’s mission-critical. In our case, building models is very important. So we have put all the effort into excelling at this.”

With new funding, a clear mission, and a unique approach to AI image creation, Recraft looks set to continue challenging the giants — one branded image at a time.

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