HeyGen AI: This AI startup plans to be the next Snapchat

This AI startup plans to be the next Snapchat.

They just raised over $5M in funding last month at a $75M valuation.

They also just hit over $18M in ARR, up from $10M in October and $1M last year.

The company plans to become a multi billion dollar tech giant with this AI revolution.

So who are they and how exactly did they do this? Here’s the story of HeyGen AI

HeyGen was founded in December 2020 before AI was mainstream and before applications like ChatGPT took off.

The 2 founders found a major application that AI could improve: generating high-quality content through visual storytelling.

The first thing they did was break down their vision into 3 steps:

1. A video engine for business (B2B)

2. A video engine for everyone (B2C)

3. A VISUAL engine for EVERYTHING

The founders quickly developed an early version of their technology and launched a gig on Fiverr to find their target market. The gig offered on-demand video footage as a spokesperson in multiple languages.

Similar services were offered on Fiverr with real humans, so they listed their service for 10% of the cost and delivered in 10 minutes instead of days. They would manually run code to deliver videos to customers.

The gig became popular and they quickly got their first couple of paying customers. This allowed the founders to understand use cases of the technology and price expectations better.

This first group of users later became the foundation for their first ever version of their product.

Fast forward to July 2022, the 2 founders launched the product. They secured the #1 product of the month in AI and the #1 product of the month in Marketing.

The product launched using a freemium model and a strong watermark. The 2 founders found out that the content created on their platform generated a network effect. This meant that the watermark had worked quite well to bring in new customers.

The product-led growth strategy caused a virality effect where it was constantly being mentioned on social media. This helped HeyGen continue to amplify its customer acquisition engine.

After the first 7 months of launch, HeyGen had reached $1M in annual recurring revenue and was on track to becoming profitable.

By October it had reached $10M in ARR, and it now does $18M in ARR with no signs of slowing down.

HeyGen has recently been in talks with Benchmark to raise an additional $60M at a $440M valuation…