HeyGen - AI Powered Video Creation at Scale

Company & Team Introduction

HeyGen is a leading AI-powered video creation platform transforming the world of content production. The company offers a suite of AI voice and Avatar tools that enable businesses to ease the video creation process, saving massive amounts of time and money compared to traditional methods. The company was founded in 2020 by Wayne Liang and Joshua Xu, two Carnegie Mellon graduates. Before founding HeyGen, Josh spent six years as a Software Engineer at Snap, while Wayne worked as a Director of Design at Smule before taking his talents to TikTok's parent company, ByteDance, as a Product Design Lead. The duo believes that AI-generated video is poised to see a meteoric rise similar to photo-sharing apps like Instagram and Snap experienced throughout the 2010s. Xu described his vision to Forbes, “Snapchat is a camera company where everyone creates content through the mobile camera; we think AI can create the content. AI could become the new camera.” HeyGen is headquartered in Los Angeles, California, but its team is distributed between LA, Toronto, SF, and Palo Alto and now has ~42 employees.

Product Overview

HeyGen’s “Core Platform” offers a range of AI-powered products that make video creation easier than ever, removing the need for actors, cameras, and studios. The company’s product velocity is impressive; it consistently releases new products and features with various use cases, like creating marketing videos, how-to guides, and training materials, some of the early use cases for HeyGen. The company has five main products:

AI Avatars - Easily create a perfect AI avatar from various ethnicities, ages, and styles.
AI Voices—Augment your voice with HeyGen’s selection of hundreds of different voice options, available in 40+ languages and 100+ regional accents. Text-to-speech technology allows users to type a prompt, and HeyGen produces a professional-sounding voiceover in minutes.
Video Translation - Translate easily using their one-click solution, which clones your natural speaking voice and style for an authentic sound in any language.
Personalized Video - HeyGen allows businesses to send personalized videos and branded landing pages for each contact in your CRM in just a few clicks.
Steaming Avatar - Boost engagement with your audience by adding a HeyGen streaming avatar for live streams and live chats with multi-language support.

Total Addressable Market

Massive market demand has come quickly for AI platforms like HeyGen, and its avatar and voice AI technologies have a range of applications across industries. The total addressable market for Digital Humans (AI Avatars) is estimated to be more than $21.5B in 2024. In addition to the already massive TAM, the market is forecasted to experience enormous expansion, growing at a stunning ~46.59% CAGR through 2031, swelling the company’s potential market opportunity to as large as $454.75B.

Business Model & The Numbers

HeyGen utilizes a simple 4-tier freemium credit-based subscription model to align its pricing with the product’s value creation and GPU costs. One credit generates one minute of video, and credits can be used for HeyGen’s “core platform,” which includes its Avatar Video, Video Translation, Streaming Avatar, Personalized Video, URL-to-Ads, and Instant Highlights. The free tier allows customers to test out the software with one credit per month, which pairs well with its product’s near-instant time-to-value, and the virality from people sharing videos with the HeyGen watermark serves as a powerful bottoms-up initiative fuelling the company’s obscene growth. For paid plans, HeyGen’s “Creator” plan starts at $29/month, giving users 180 credits/year to use across all of the products on its “core platform”, removing the HeyGen watermark, and fast video generation. The “Team” plan starts at $149/month, giving users 360 credits/year, a multi-user workspace, roles & permissions, brand management tools, faster video generation, and 4k resolution support. For studio-quality content and enterprise-grade security, the company offers a quote-based enterprise plan that can be tailored to a company’s specific needs. HeyGen’s revenue has been explosive since its founding. The company launched publicly in July 2022 and went from 0 to $1M ARR in only 178 days. Since hitting $1M ARR in February 2023, HeyGen has scaled its ARR north of $35M. Not only has growth been substantial, but HeyGen has also been profitable since Q3 2023, giving it a highly coveted combination of incredible growth and profitability.

Traction

Early growth for HeyGen’s platform has been rapid, and it is among the fastest-growing startups in the world. The company lists stalwart enterprises such as Amazon, Salesforce, Nvidia, McDonald's, and Accenture as customers and serves over 40,000 paying businesses globally. HeyGen’s founders say their products serve a range of customers, “From European manufacturers to small businesses to global non-profits to Fortune 500 companies.” They also talk about how their products attract businesses and industries that are far from the typical early adopters of AI. The company has over 500 G2 reviews with a 4.8-star rating.

Competitors

The recent technological breakthroughs in AI have created a strong market pull with such incredible reductions in costs and time compared to traditional methods. The enormous opportunity has attracted ambitious teams with similar visions to the space, with HeyGen’s main competitor being Synthesia. The company was founded in 2017 by 4 AI researchers and entrepreneurs with impressive backgrounds from UCL, Stanford, Technical University of Munich, and Cambridge. When comparing the two platforms, they’re overall quite similar, with some slight nuances. For ease of use and onboarding, HeyGen reigns supreme with its intuitive user interface, which pairs well with its freemium plan. Synthesia recently released a free plan and reduced pricing, which Venture Scout believes is due to the increased momentum HeyGen is seeing. While the learning curve of Synthesia is steeper, it can be more customizable for larger-scale products. Synthesia also has the first-mover advantage in space, but HeyGen is quickly gaining market share. Synthesia serves over 50,000 customers, including Zoom Video, Heineken, Xerox, and Reuters and has received over 1300 reviews on G2 and a 4.7 rating. Synthesia is backed by several top investors, including Kleiner Perkins, GV, Accel, and Nvidia. The company most recently raised a $90M Series C round of funding in June 2023, valuing the company at $1B post-money. Synthesia has raised a total of $156.6M across five rounds of funding. The company is headquartered in London, England and has scaled its team to ~370 employees.

Funding

HeyGen has raised three rounds of funding since its founding in 2020. The company raised an initial $9M seed round in November 2022 from an impressive group of investors, including IDG, Sequoia Capital China, and Baidu Ventures. In late 2023, HeyGen raised an additional round of funding of around $5.6M at a 75M valuation led by Conviction VC, with Benchmark also participating in the round. The company has undergone explosive growth over the past few years; recently released at the end of June 2024 that they had raised an enormous $60M Series A round led by new Benchmark partner Victor Lazarte and participation from top firms such as Thrive Capital, Conviction VC, SV Angel, and Bond plus notable angel investors including Elad Gil, Dylan Feld (Co-Founder, Figma), Neil Mehta (MP, GreenOaks Capital), and Aviv Nevo. HeyGen has raised a total of ~$74.6M in funding, and their most recent fundraise valued the company at $500M post-money.