AI video startup Hedra has made it easy for anyone to generate Lifelike digital characters and raised $32 million in Series A funding led by Andreessen Horowitz’s infrastructure fund. Existing investors including A16Z Speedrun, Abstract and Index Ventures took part in the round. Matt Bornstein of A16Z is also on the board.
In the latest round, Hedra’s total will be increased to $43 million, bringing the company to a valuation of around $200 million.
The company, quietly launched in 2023, is behind some of the more unexpected uses of AI video technology these days, like the virus trends of AI-generated Baby Podcasts. One video features an AI dog complaining about life with a newborn. It’s strange, but people are hooked on it.
The three Hedra characters models power many of these clips. The model provides a web-based studio where users create, edit and style videos by blending text, images and audio to generate expressive digital characters. It allows people to even transfer visual or audio styles between clips. And while this trend may be more playful, the technology is also used by marketers, creating brand avatars and virtual spokesmen.
The origins of Hedra are personal and practical for founder and CEO Michael Lingelbach. Before completing his PhD at Stanford University, he performed on stage for years as an actor in theatre. It is the background that shaped his belief that the characters are at the heart of every story.
That belief, coupled with the gaps he noticed in the market, led to Hedra. Tools like Synthesia can generate avatars and runways can generate video clips, but nothing truly connects the two, especially in long form of dialogue with incredible, expressive digital characters. Last month, Adobe featured Synthesia after investing in startups. This is a move that highlights the growing demand for AI-generated videos in the corporate world.
“We can build next-generation storytelling technology to allow content creators and enterprise marketers to tell their stories themselves. Overcoming the creepy valley of compelling performance is the most challenging frontier in video, and in the Character 3 Foundation model, we’re dedicated to crossing it.
The company released its first video model in June 2024, quickly securing $10 million in seed funds from Index Ventures, Abstract Ventures and A16Z Speedrun. Earlier this year, Amazon’s Alexa fund participated.
Things were taken up further after the character 3 model began in March. Lingelbach said it marked a turning point in user growth and launched a wave of investor interest. The company is currently planning to train the next model with fresh funds, with better customization and the ability for characters to respond to users.
Currently, Hedra is focused on attracting creators and professional sumers. However, it has also attracted interest from the marketing teams of large companies. This product is built for flexibility. Hedra handles character movements and animations, but is integrated with other models in video (such as Veo 2 and Kling), images (Flux, Imagen3, Sana, Ideogram V2), and Voice (Elevenlabs, Cartesia).
The AI video space is busy. Competitors include Caption (also supported by A16Z, focusing on smartphone users), Cheehoo (working with Hollywood Studios), Synthesia, and Heygen. However, Hedra argues that the character is simply more expressive and believable than what others have to offer.
“AI companies can create amazing clips and simple actions of the environment, but they can’t produce meaningful dialogue or animation,” Bornet said in an email. “It’s not just about making videos, it’s about creating resonating stories. It mainly depends on the people and characters of the story, and that’s exactly what Hedra is building.”
Hedra is still small, but today there are 20 people, but we plan to triple that personnel when building the platform. And if talking is just the beginning, things can be odd.
Hedra Team (credit: Hedra)
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