Stability AI appoints new CEO and closes funding round reportedly worth $80M

Stability AI Ltd. today appointed Prem Akkaraju chief executive officer and announced that it has raised funding from a group of prominent investors.

The development comes three months after the startup’s founding CEO, Emad Mostaque, stepped down. His resignation was reportedly preceded by several other executive departures. A number of key engineers are believed to have left as well around the same time.

Akkaraju previously led Academy Award-winning special effects studio Weta Digital. The studio’s software unit was acquired by Unity Technologies Inc. in 2019 for $1.625 billion. Akkaraju is succeeding Shan Shan Wong and Christian Laforte, who took over as Stability AI’s co-CEOs when Mostaque left in March.

Akkaraju is also a member of the investor group from which Stability raised its newly disclosed funding round. The consortium’s other participants are former Google LLC CEO Eric Schmidt, former Facebook president Sean Parker and venture capitalist Robert Nelsen. They were joined by Greycroft, Coatue Management, Sound Ventures, Lightspeed Venture Partners and O’Shaughnessy Ventures.

The Wall Street Journal reported that the investment is worth $80 million. Additionally, the consortium reportedly persuaded Stability AI suppliers to forgive more than $100 million in debt and $300 million in future spending obligations.