This one's worth opening because Midjourney did something counterintuitive: an AI company living off Discord image-gen subscriptions, with zero outside funding, reverse-hatched a full-body ultrasound CT scanner. The machine itself isn't mysterious—you stand in a water ring, 40 Butterfly ultrasound-on-chip modules fire sound waves from all directions, and 21 servers reconstruct 3D cross-sections. It can't scan brain, lungs, or bowel; it's positioned for body composition analysis under FDA Class II, a much lower regulatory bar than diagnostic devices.
The real story is the funding path. Midjourney's announcement page says "no investors," and Crunchbase shows zero funding rounds. The $15M Butterfly upfront payment, $10M annual licensing, 9-person hardware team, and a four-story Union Square spa lease are all covered by subscription revenue from millions of users. Holz's previous startup Leap Motion raised over $100M and sold for roughly $30M—that history directly explains his VC aversion.
Don't read this as "permanently bootstrapped." Holz himself floated a $20B capex figure for 50,000 units. Even with the most optimistic third-party revenue estimate ($500M ARR, 50% margins), free cash flow would need 80 years to cover that. Outside capital likely becomes necessary at scale. Only 12 people have been scanned, no clinical data is published, and Butterfly carries $879M in cumulative losses—a single-point supply-chain risk. Treat this as a stage-specific sample of software cash flow funding hardware, not a replicable model.