TechFlow news, on December 19, according to The Block, Fraction AI, a crypto and artificial intelligence startup focused on decentralized data labeling, has raised $6 million in pre-seed funding. The round was co-led by Spartan Group and Symbolic Capital, with participation from Borderless Capital, Anagram, Foresight Ventures, Karatage, and others. Angel investors including Sandeep Nailwal, co-founder of Polygon, and Illia Polosukhin, co-founder of NEAR Protocol, also joined the round and will serve as advisors.
Shashank Yadav, founder and CEO of Fraction AI, said the company began fundraising for its pre-seed round in April this year and completed it in September. Yadav noted that the financing structure is a Simple Agreement for Future Equity (SAFE) with token warrants attached, but declined to comment on the post-money valuation.
Fraction AI was founded in February 2024 and aims to reshape the data labeling process through decentralization, using a hybrid approach combining human insights with AI agents. Its platform primarily consists of three types of participants: stakers who earn rewards by staking ETH or liquid staking tokens such as stETH; developers who create AI agents and participate in challenges; and reviewers—LLMs that evaluate results based on specific criteria—who participate using the native token FRAC.
