AI’s ability to reinvent web search remains murky, but the technology’s impact on everyday tools looks more promising. Case in point: A startup called Capsule uses AI in video editing software to improve the speed and efficiency of post-production edits. After launching its AI-powered editor in beta, the company secured $4.75 million in seed funding to bring the product to market.
In the longer term, Capsule says such technology could enable anyone to be creative with video, even if they are not professional video editors.
The company hasn’t always been in AI technology. Founded in 2020, Capsule is from the same team that built animated GIF capture tool and social network Phhhoto, which ultimately lost out to Instagram clone Boomerang. After shutting down their app in 2017, they transitioned to an experiential marketing company for live events, Hypno. But they soon had to pivot when the Covid-19 pandemic ended the need for Hypno’s in-person photo booths and other interactive experiences.
This led to the creation of Capsule, a platform that started as a way for brands to reach their communities in the post-Covid era using online Q&As and video stories. In 2021, the company raised $2 million in pre-seed funding for its collaborative video platform from Array Ventures, Bloomberg Beta, and various angels.
To date, 90% of Capsule’s revenue comes from the business, the company says, but declined to share its run rate. Specifically, the company caters to an underserved market of teams without video expertise, but who need consistency in branding. Its collaborative dashboard has been used by companies like Snowflake, TED, Salesforce, and The Wall Street Journal, among others.
More recently, Capsule has started exploring how new AI models could improve its product.
Citing data from Hubspot, the company points out that short form video is expected to grow faster than any other format in 2023 and over 90% of marketers said they plan to maintain or increase their investment in video creation . But the demand for video exceeds the supply from professional video editors, noted Capsule co-founder and CEO Champ Bennett.
“Despite the large number of video tools on the market, the needs of enterprise teams have been largely ignored,” he said in the company’s funding announcement. “Ask anyone in marketing, communications, sales, or success and they’ll tell you video outperforms all other formats, but they’ll also tell you they don’t use it often enough because of the cost and the complexity of its use.
To address these challenges, Capsule created AI Studio, which focuses on AI-powered post-production video editing.
The company presented a technology demo in December (see below), which uses AI and machine learning in a variety of models, including an ASR (automatic speech recognition) model to transcribe audio from video to text.
It also offers a broadcast model to generate b-roll images from the transcript as well as a generative LLM (Large Language Model) that abstracts the text from the transcript.
AI Studio software runs in the browser, requiring no app or extension to operate, the company says.
After uploading a video to the platform, Capsule creates the transcript which is placed alongside the video for use in edits. In the demo, the company showed how a user could select a block of text, then click a button to have the text automatically summarized and transformed into a title card, using AI and its video markup language. There are different card styles available, including an animated title card page and a title card that appears below the video, each of which can be selected with a click.
He also showed how you can select a block of text and then have the AI automatically generate an image based on the topic identified in the highlighted text. Additionally, you can click in the text prompt field and adjust the text for finer control over the final results.
Another feature lets you select a line of text to make it appear as one of the many caption styles available, like full-screen text, animated captions, or even a tweet-style caption.
“What we do for video is similar to what companies like Jasper do for copywriting or Replit does for coding,” Bennett told TechCrunch. “We don’t own the models. Instead, we leverage the best foundational models to make video creators 10-100x more productive, while simultaneously lowering the barrier to entry so marketing, sales, success, and leadership teams can create compelling brand videos on their own.
The edits themselves are powered by Capsule’s video scripting language, CapsuleScript, built over the past two years and designed to work in the browser. All outputs from the AI model are brought in as inputs to CapsuleScript.
“Think what HTML/CSS is to websites, CapsuleScript is to video. It can render video dynamically, both at build time and runtime, making it possible for the first time to create customized video at scale,” Bennett says, but he points out that Capsule customers aren’t looking for a fully automated, one-click solution, even though CapsuleScript would be capable of that.
“In reality, what customers really want is 80% automation and 20% personalization so they can tell a unique, creative story without a ton of friction,” he explains.
After the demo was released, the company had to put access to AI Studio behind a waiting list due to demand, the company said.
With this additional funding, Capsule says it aims to hire key teams in engineering, product design, and marketing to help bring its AI Studio product to market faster. He’s looking to add a dozen full-time staff, including an ML engineer, frontend engineer, video and marketing manager, and product designer.
Investors backing the company in the new round that ended in late January include Human Ventures, Swift Ventures, InVision founder Clark Valberg’s Tiferes Ventures, Behind Genius Ventures, as well as its pre-seed investors Array. Ventures and Bloomberg Beta.
Angel investors include Replit CEO Amjad Masad, Dropbox CTO Arash Ferdowsi, Figma sales manager Kyle Parrish, former director of audio and video at Spotify/Anchor founder Mike Mignano, Chorus.ai co-founder Roy Ranani and Gumroad founder Sahil Lavingia.
Including the new funding, the New York-based startup has raised $6.75 million since its inception.
