Mj earlier versions were around before SD came out. Before dall-e 2 too, but after 1 IIRC. So I assume they have their own custom setup. Perhaps based on dall-e 1 paper originally (not weights as they were never published) and improved from there.
Is Midjourney heavily funded? Because if they can battle SD why aren't we seeing lots of people doing the same, even in the Open Source space?