As the world continues to work on how to handle the explosion of deepfake content online, it appears that not all AI-generated videos are causing controversy. Compositiona London startup that builds products around ultra-realistic avatar AI technology says it’s a big hit with businesses, with about 60,000 of them — 1 million users — using the technology to create avatar-based videos from text documents, for sales and marketing, for training and more.
Now VCs also want in on the action. Synthesia confirmed today that it has closed a $180 million funding round, a Series D that pushes the company’s valuation to $2.1 billion. NEA is leading the round, with participation from new investors WiL (World Innovation Lab), Atlassian Ventures and PSP Growth, as well as previous backers GV and MMC Ventures. Synthesia has raised $330 million to date.
The startup plans to use the funding for hiring, particularly to expand in Asia Pacific – most of Synthesia’s business today is in Europe and North America – and to continue developing its products.
“We’re doubling down on all the things we’re already doing right,” CEO and co-founder Victor Riparbelli said in an interview. “We want to improve our avatars.” He said the company’s “long road map” includes more realistic traffic. be able to transport avatars to different environments. avatars that can interact with objects, for example, to provide physical demonstrations. and avatars that can interact with users. It will also eat some of its own back-end by creating more “agents” to help customers create avatar-based content more easily.
One area where he is not chasing activity is mergers and acquisitions. Synthesia to date has not made any acquisitions, and Riparbelli said its preference is to build its technology in-house, while using APIs for what it doesn’t build itself. For example, it works with Eleven Labs for voice and taps and optimizes a variety of large third-party language models rather than building its own.
Synthesia’s cycle has been in the works for at least a few months: The Information was mentioned that it was raising $150 million in November 2024. For a little more fundraising context, it’s been about 18 months since Synthesia last disclosed funding: in June 2023, it closed a $90 million round at a $1 billion valuation with previous backers including Kleiner Perkins and Accel;
In the interim, AI companies have been a huge magnet for VCs, providing a bright spot in a somewhat bland funding landscape. AI startups accounted for more than 37% of the $368.5 billion invested in all startups in 2024 globally, according to PitchBook data. In the US the figure was even more pronounced, with AI startups garnering nearly 50% of the $209 billion invested last year.
And yes, there are many topics in the field of artificial intelligence. Energy consumption required to train and operate AI models, significant copyright issues regarding how models are trained, AI being weaponized as in the case of deepfakes or malicious hacking, AI replacing humans and work them and the AI that gets it wrong — all huge problems that have yet to be substantially solved. But there are also some important advocates who will push the AI industry to even higher, more entertaining heights. Synthesia was one of the companies vetted by the UK government this week when it launched its big AI action plan, which aims to award multibillion-dollar deals to AI firms to rebuild public services and the economy .
Synthesia says it now has 60,000 businesses as customers, up from 50,000 in June 2023, and has aimed to carve out its own niche in the space as the launch platform for businesses looking to grow their video interactions.
It does so at a time when advanced AI video functionality is becoming more common. There are startups working on the ability to extrapolate full product videos from basic documents, while others aim to create avatars capable of real-time interactions and real-time video assistants. Some claim to be able to create live avatars of their users from a single minute video. (A simple test to see how crowded the market is here is to Google Synthesia and check how many companies are buying search ads based on its name. There are a lot.)
Synthesia is not immune to product race. It’s been building a “2.0” version of its platform for a while now, and has already released a number of related features, including its own personal avatars that users can make with a laptop or phone camera that have feelings. a Chrome extension which creates basic videos based on screen data. his own version of one AI video assistant which can convert documents to videos. multiple language options. and collaborative functions to edit a video simultaneously.
More specifically, though, Riparbelli believes the company has an advantage by focusing exclusively on business users, and its investors say that’s what makes the startup attractive.
“Synthesia is one of the few AI companies that can take real cutting-edge AI and turn it into something with real utility,” Vidu Shanmugarajah, a partner at Google Ventures in London, said in an interview. “He has an excellent customer focus. They are obsessed with driving value in a hands-on environment. Combining that into a platform that is secure and compatible is extremely difficult to do.”
It’s also interesting to see Atlassian investing in this round. The company has integrated AI features into its various apps, and it seems only a matter of time before a platform like Jira can start adding more video tools to the mix, opening the door for a partnership with its portfolio company.
