AI firm Synthesia hits $1 billion valuation in Nvidia-backed Series C

Synthesia, a digital media platform that allows users to create videos generated by artificial intelligence, has announced that it has raised $90 million from investors — including US chip giant Nvidia, according to CNBC EXCLUSIVELY.

The London-based company raised money in a funding round led by Accel, an early investor in Facebook, Slack and Spotify. Nvidia entered as a strategic investor, investing an undisclosed amount of money. Other investors include Kleiner Perkins, GV, FirstMark Capital and MMC.

Founded in 2017 by researchers and entrepreneurs Victor Reparbelli, Matthias Neissner, Stephen Tgerld and Lourdes Agapito, Synthesia is developing software that lets people create their own digital avatars for corporate presentations, training videos – or even compliments to colleagues in more than 120 languages. different.

His ultimate goal is to eliminate cameras, microphones, actors, lengthy edits, and other costs from the professional video production process. To do this, Synthesia created gifs that looked like a human, but were generated by AI. The avatars are based on real actors speaking in front of a green screen.

“Productivity can be improved because you reduce the cost of producing video to the cost of producing PowerPoint,” said Philip Pottery, of Accel, lead investor in Cynthecia Series CCNBC, adding that video adoption has spread by consumer platforms such as YouTube, Netflix and TikTok. .

“Video is a much better medium for communicating knowledge. When we think about and evaluate a company’s potential, we think about what it can bring back,[and]in the case of Synthesia, we’re just scratching the surface.”

Synthesia is a form of generative AI, similar to OpenAI’s ChatGPT. But the company says it has been working on its generative AI for years, and that while ChatGPT may have only recently popped into the public consciousness, generative AI itself is not a new technology.

Synthesia sells to institutional clients, including Tiffany’s, IHG, and Moody’s Analytics. The company doesn’t disclose sales or revenue metrics, though it says it has “consistently driven triple-digit growth,” with more than 12 million videos produced on the platform to date. The company said the number of users on Synthesia was up 456% year-over-year.

Synthesia plans to step up investment in its technology, with a particular focus on advancing AI research and making Synthesia avatars able to perform more tasks.

“We work with 35% of the Fortune 100 (focusing on) product marketing, customer support, customer success — there’s a lot of text in the company that you want to turn into video,” Reparbelli told CNBC.

“As we progress to the next phase of the next generation of Synthesia technology, it’s all about making avatars more expressive, being able to do more things, walk around a room, and have conversations,” he added.

Reparbelli explained that Nvidia isn’t just a semiconductor manufacturer — it’s also a powerhouse of research and development talent with an army of engineers, academics, and researchers producing papers on the topic.

“They’re not just a chip producer,” he said. “They have amazing research teams that lead pretty much in terms of, how do you train these really big models? What works, what doesn’t?”

Business interested Previously mentioned that Synthesia was in talks with investors to raise between $50 million and $75 million in new funds at a valuation of about $1 billion.

The report did not include details about Nvidia’s involvement, nor did it mention the total $90 million raised.

Synthesia is one of many companies gaining investor interest using artificial intelligence and enterprise software that can reduce the costs involved in certain business operations. Companies are looking to cut expenses everywhere possible to combat spiraling inflation and prepare for a potential recession.

Last week, French business planning software company Pigment raised $88 million from investors including Iconiq Growth, Felix Capital, Meritech IVP and FirstMark, in part to ramp up its investment in artificial intelligence.

Generative AI has been a rare bright spot in a European technology market suffering from declining funding and declining valuations. Investors have moved from high-growth technology companies into value-added sectors with more flexible income generation, such as financials, industrials, energy, and consumer staples.

A report by venture capital firm Atomico recently showed that funding for tech startups in Europe was on track to drop another 39% in 2023 to $51 billion from $83 billion in 2022.

However, Atomico said AI was one area that attracted more investment, with generative AI accounting for 35% of all investment in AI and machine learning companies last year — the highest share ever and a big jump from 5% in 2022. .

There are concerns that the use of advanced video AI tools such as Synthesia could lead to fake videos, which take the shape of the user and manipulate them to make it appear as if they are saying or doing something they are not.

There has also been a growing number of calls from technology leaders and academics for Global has stopped developing AI beyond systems like OpenAI’s GPT-4, due to concerns that as the technology becomes so advanced, it could pose an existential threat to humanity.

Synthesia first attracted mainstream attention in 2019 for its a deepfake video which featured an animated digital version of famous footballer David Beckham speaking about the campaign to eradicate malaria in nine languages.

While this was done with Beckham’s approval and with good reason, the more widespread use of deepfakes has led to concerns about the potential for misinformation.

To address this, Synthesia says it kept ethics in mind while developing its software. The company requires consent from people who appear as avatars in its software, and uses a combination of humans and machine learning to target material such as profanity and hate speech.

It is also registered with Responsible Synthetic Media Practices, a voluntary, industry-wide framework for the ethical and responsible development, creation, and sharing of synthetic media.

“There are so many different discourses going on right now. There’s one discourse about long-term existential risk scenarios. I think it’s important to talk about it as well. But I’d love to see more focus on where are we today?” Reparelli told CNBC in an interview.

“These technologies are really powerful. How do we deal with hallucinations? How do we deal with all the problems that arise?” he added. “There are definitely pitfalls. But there are also a lot of opportunities, I think, to level the playing field and enable people to do more with less.”