UK maker of AI avatars nearly doubles valuation to $4bn after funding round

A British AI startup that makes realistic video avatars has almost doubled its valuation to $4bn (£3bn), in a boost for the UK technology sector.Synthesia was valued at $2.1bn last year and moved into new offices in central London, marking the moment with a ceremony attended by the Sadiq Khan, the city’s mayor, and Peter Kyle, then technology secretary.On Monday, it announced its latest funding round, led by an existing investor, Google Ventures, had raised $200m and valued the British company at $4bn. Google Ventures is the search firm’s venture capital arm.Synthesia uses human actors to generate digital avatars of people and also offers employers the ability to create replicas of their staff. Those avatars are then deployed by organisations in corporate videos in a range of scenarios such as health and safety in the workplace, advising on cybersecurity and how to communicate better at work.The company counts 70% of the FTSE 100 as clients, including NatWest, Lloyds Bank and British Gas. It is also used by non-corporate bodies including the NHS, the European Commission and the United Nations.The startup is also developing new avatars that will help train employees and give them new skills, through scenarios such as role-playing and giving tailored explanations.Synthesia’s co-founder, Steffen Tjerrild, said the increased valuation reflected the commitment of the company’s longstanding backers rather than the investment hype surrounding the AI sector. “Existing investors have seen the progress, have seen the numbers, have seen them compound year over year,” he said. “That is also telling a story that this is less [a case of] external investors trying to kind of hype it up, but more about validation from existing investors as well.”Last year, a leading British tech investor, James Anderson, said he found sharp increases in valuations of AI startups such as OpenAI and Anthropic “disconcerting”. Tjerrild said Synthesia was focusing on executing its business plan, which, he added, was backed by investors who were long-term supporters.“This round is led by insiders, or predominantly existing investors that deeply understand the business, have seen the execution and the improvement of the business over many years,” he said.Synthesia generated revenues of $58.3m in 2024 but made a pre-tax loss of $59.2m, according to its latest published accounts, which the company said reflected its investment in headcount, its technology and new offices. Synthesia said it was on track to make $200m in revenues this year.The $4bn valuation puts the company on a par with UK broadcaster ITV, which is worth £3.1bn. Tjerrild’s shareholding in Synthesia is now worth $160m, the same as its chief executive and fellow co-founder, Victor Riparbelli.Synthesia was founded in 2017 by the two Danish nationals, as well as the computer scientists Matthias Niessner and Lourdes Agapito.Last year, the London mayor said Synthesia was doing “incredibly well” as he opened its new offices. However, in a speech this month Khan said AI would “usher in a new era of mass unemployment” if used recklessly, as intelligent, autonomous systems proved cheap replacements for humans.Tjerrild said he believed AI would enable businesses to hire more staff. “We’re an AI-first company, we have 600 employees and we hired 40% more people last year,” he said. “As a business owner myself, if my employees become more productive that means I can invest and hire more people.