Valuation
$1.00B
2024
Funding
$156.60M
2024
Revenue
Over their first 3 years in business, Synthesia (founded in 2017) generated primarily service revenue of less than $1M by providing AI video dubbing as a service to video production agencies and Hollywood studios.
In summer 2020, they launched their self-service video generation SaaS platform. It took them just 6 months, from August to December, to reach $1M ARR.
Product
Synthesia is an AI video generation platform that allows customers to create video content by simply typing in text, without the need for cameras, studios, actors, etc.
The company's core technology is based around AI avatars that look like photorealistic people and can be made to speak by typing in text.
Synthesia was founded in 2017 by Victor Riparbelli and others.
The initial conception of the company came in 2016 when Riparbelli saw a research paper showing the potential of neural networks to generate highly realistic video frames. He believed this technology would fundamentally change media production.
After the initial organic traction for the SaaS platform they launched in 2020, Synthesia focused on engineering a strong viral growth loop.
When users created a video, they shared it with 3 people on average, of whom 1.5 came back and created their own video.
TikTok influencers organically picked up Synthesia and created viral videos about it that got tens of millions of views. This fueled the viral loop further.
Business Model
Synthesia operates a SaaS platform for creating AI videos.
Pricing starts at $30/month and goes up to enterprise tiers. Customers use the platform's AI avatars, voices, and editing tools to turn text scripts or PowerPoint/PDF content into video.
The key value prop is enabling SMBs and enterprises to produce informational videos for things like employee training, sales enablement, product how-tos, etc. at massive scale and low cost.
Today, ~70% of Synthesia's revenue comes from enterprise customers and 30% from self-serve SaaS.
Synthesia leaned into enterprise sales earlier than a typical PLG company. They saw enterprises had recurring, sticky use cases (e.g. training) while self-serve was more sporadic (e.g. one-off marketing videos). However, the self-serve funnel and inbound marketing that they built early on feeds their enterprise sales cycle, with many enterprise leads starting as self-serve users.
Competition
HeyGen
HeyGen and Synthesia are direct competitors in the AI avatar video generation market, offering similar SaaS tools for users to create realistic AI-generated videos.
Both platforms provide user-friendly interfaces, a wide range of AI avatars, voices, and languages, as well as customizable video templates for different use cases like sales, marketing, learning & development, and onboarding.
There is some variation in pricing: at $24/month, HeyGen's lowest-tier Creator plan offers 180 credits (1 credit = 1 minute of video) per year, while Synthesia's Starter plan at $22/month offers 120 minutes of video per year.
Tavus
Rather than build a SaaS platform, Tavus differentiates by focusing on providing an API for developers to integrate AI avatar technology into their own applications.
Tavus sees its role as the expert on replica video models, powering the application layers for other companies. The company believes in a future where digital twins are present across multiple platforms, not just in a single point solution.
TAM Expansion
Synthesia believes its long-term opportunity goes far beyond its current product. Some key areas it is betting on:
- Expanding from pure video generation to a full AI-powered video platform (e.g. adding screen recording, editing tools, etc.)
- Becoming the "content management system of the future" by allowing any text content (e.g. a blog post) to be instantly converted into interactive, personalized video
- Making video/avatar creation as easy as writing a text document - enabling a world where most business communication happens via video vs. text
- Exploring new video formats and interaction models that go beyond today's "linear" videos (e.g. interactive conversations with avatars)
The company believes that in 5-10 years, AI technologies like Synthesia will make video creation as accessible as writing is today, fundamentally transforming how we communicate and learn.
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