AI video platform Synthesia doubles valuation to $2.1 billion

LONDON — Synthesia, a video platform that uses artificial intelligence to create clips featuring multilingual avatars of people, has raised $180 million in an investment round, valuing the startup at $2.1 billion.

That’s more than double what Synthesia was worth at $1 billion in its last funding in 2023.

The London-based startup said on Wednesday that the funding round was led by venture capital firm NEA, with participation from Atlassian Ventures, World Innovation Lab and PSP Growth.

The NEA counts Uber and TikTok parent company ByteDance among its portfolio companies. Synthesia is also backed by the chip giant Nvidia.

Victor Riparbelli, CEO of Synthesia, told CNBC that investors valued the business differently from other companies in the space because of its focus on “utility.”

“Of course, the hype cycle is good for us,” Riparbelli said in an interview. “It’s important for us to build a really good business.”

Synthesia is not “dependent” on venture capital — unlike companies like OpenAI, Anthropic and Mistral, Riparbelli added.

These startups have raised billions of dollars at staggering valuations while spending significant sums of money to train and develop their basic AI models.

Synthesia isn’t the only startup shaking up the world of AI-powered video production. Other startups offer AI-powered video content creation and editing solutions, e.g Veed.io and runway.

Meanwhile, the likes of OpenAI and Adobe also developed generative AI tools for video creation.

Eric Love, a partner at London-based venture capital firm IVP, told CNBC that AI application-level companies haven’t generated as much investor buzz as infrastructure-level firms.

“The amount of money that application-level companies have to raise isn’t that big — and so the valuations aren’t necessarily going to be as mind-blowing” as companies like Nvidia, Liew told CNBC last month.

Riparbelli said the money raised from the latest funding round will be used to invest in “more of the same,” driving product development and investing more in security and compliance.

Last year, Synthesia made a number of updates to its platform, including the ability to create AI avatars using a laptop or phone webcam, full-body avatars with hands and arms, and a screen recording tool that has an AI avatar guide users through what they’re viewing .

In terms of AI security, in October Synthesia held a red team public test for online harm risks, which demonstrated how the firm’s compliance monitors attempts to create unauthorized deepfakes of people or use their avatars to promote suicide, adult content or gambling.

The National Institute of Standards and Technology test was conducted by Ruman Chowdhury, a well-known data scientist who was formerly the head of AI ethics at Twitter – before it became known as X under Elon Musk.

Riparbelli said Synthesia is seeing increased interest from large enterprise customers, particularly in the U.S., due to its focus on security and compliance.

More than half of Synthesia’s annual revenue now comes from customers in the US, while Europe accounts for nearly half.

Synthesia is also ramping up hiring. The company recently appointed former Amazon executive Peter Hill as its chief technology officer. The company now employs more than 400 people worldwide.

Synthesia’s announcement followed the unveiling by Prime Minister Keir Starmer A 50-point plan to make the UK a world leader in artificial intelligence.

UK Technology Secretary Peter Kyle said the investment “demonstrates investor confidence in UK technology” and “underscores UK companies’ global leadership in ground-breaking innovation in generative artificial intelligence”.