Synthesia raises $180 million at $2.1 billion valuation for its B2B AI video platform

As the world goes on work through how to do handle explosion of deepfake content online, it seems that not all videos created by AI are controversial. Synthesisa London startup that builds products around highly realistic AI avatar technology says it’s a big hit with businesses, with about 60,000 of them — 1 million users — tapping the technology to build video-based avatars from text documents, for sales and marketing, for training and more.

Now VCs also want to get in on the action. Synthesia confirmed today that it has closed a $180 million funding round, a Series D that catapults 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, plus 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 to evolve the their products.

“We’re doubling down on all the things we’re already doing well,” CEO and co-founder Victor Riparbelli said in an interview. “We want to make our avatars better.” He said that the “long roadmap” of the company includes a more realistic movement; be able to bring the avatars to different environments; avatars that can interact with objects to, for example, provide physical manifestations; and avatars that can interact with users. It’s also going to eat some of its own dogfood by building more “agents” to help customers create avatar-based content more easily.

One area where it is not pursuing activity is in M&A. Synthesia to date has not made any acquisitions and Riparbelli said his preference is to build his technology in-house, using APIs for what he has not built himself. For example, it works with Eleven Labs for voice, and taps and tunes a variety of third-party Large Language Models instead of building its own.

The Synthesia tour is in the works for at least a few months: Information reported which was raising $150 million in November 2024. For a little more fundraising context, about 18 months have passed since the last financing disclosed by Synthesia: in June 2023, closed a $90 million round at a $1 billion valuation with previous backers including Kleiner Perkins and Accel.

In the meantime, AI companies have been a huge magnet for VCs, providing a bright spot in a somewhat insignificant funding landscape. AI startups will account for more than 37% of the $368.5 billion invested in all startups in 2024 worldwide, according to PitchBook data. In the United States, the proportion was even more marked, with AI startups collecting almost 50% of the $209 billion invested last year.

And yes, problems abound in the AI ​​field. The energy consumption required to train and run AI models, major copyright issues regarding model training, AIs that weaponize themselves as in the case of deepfakes or malicious hackers, AIs that replace humans and their work, and the AI ​​gets it wrong—all huge problems that have yet to be solved in a meaningful way. But there are also some significant advocates who will push the AI ​​industry to even higher and hyped-up heights. Synthesia was one of the companies scrutinized by the British government this week when it launched its great AI action planwith the intention of dole out billions in deals to AI companies to rebuild public services and the economy.

Synthesia says that it now has 60,000 companies as customers, compared to 50,000 in June 2023, and its goal has been to carve out its own niche in the space as the platform for companies trying to build their interactions video.

It does so at a time when advanced video AI functionality is becoming increasingly common. There are startups working on the ability to extrapolate full product video out of the basic documents, while others aim to build avatar capable of real-time interaction and real time video assistants. Some claim to be able to create realistic avatars of their users from just one minute of video. (A simple test to see how crowded the market is here is to put Synthesia in Google, and check how many companies are buying search ads against their name. There are a lot.)

Synthesia is not immune to product race. It has been building a “2.0” version of its platform for some time and has already released a number of related features, including its own take. personal avatars which users can do with a laptop camera or a working phone emotions; a Chrome extension that builds basic videos based on screen data; his own version of an AI video assistant that can convert documents to video; multilingual options; and collaboration features for people to edit a video simultaneously.

More to the point, however, Riparbelli believes the company has an advantage by focusing directly 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 actually translate it into something really useful,” Vidu Shanmugarajah, a Google Ventures partner in London, said in an interview. “It’s extremely customer focused. They’re obsessed with driving value in a practical environment. Putting it together in a platform that’s secure and comprehensive is super hard to do.”

It’s also interesting to see Atlassian investing in this round. The company has been injecting AI functionality into its various apps, and it seems only a matter of time that a platform like Jira could start adding more video tools to that mix, opening it up. the door for a collaboration with its portfolio company.