Viggle AI closes $26 million Series A funding round to expand AI-powered video generator

Toronto-based generative artificial intelligence (AI) startup Viggle AI has secured nearly CAD$26 million (USD$19 million) in a Series A funding round to fuel the growth of its platform that uses AI to help users create videos from simple text and image prompts.

Viggle launched its app in March of this year and the capabilities of the company's technology went viral shortly after when videos circulated online of Joaquin Phoenix's Joker persona replacing rapper Lil Yachty's stage appearance at the 2021 Summer Smash Festival. This evolved into a trending meme format in April of this year when social media users began using Viggle to insert other celebrities and characters into the same video.

Eva Lau of TSFV described Viggle’s recent growth as “whiplash-inducing.”

This helped the early-stage AI startup build a community of more than 4.3 million members on messaging platform Discord and secure new funding from Silicon Valley-based Andreessen Horowitz (a16z) and Toronto-based Two Small Fish Ventures (TSFV).

In an interview with BetaKit, Viggle co-founder and CEO Hang Chu said Viggle is “really, really excited about this virality” and noted that product growth made closing this round “a little easier.”

Viggle's Series A funding round, consisting entirely of equity and primary capital, closed earlier this month and was led by a16z with support from new investor TSFV and other undisclosed backers. Chu declined to disclose the startup's valuation. With this round, Viggle's total funding is more than CAD$27 million (USD$20 million). The startup plans to invest its latest capital in developing a stronger model, adding new features and improving the user experience.

“There are many text-to-video generators, but they are mainly pixel-based models [that] are difficult to control and it's difficult to really precisely edit what's happening in the video,” Chu said. “What we do differently is that we focus on controllability.”

Chu says one of the things that sets Viggle apart is its proprietary JST-1 technology, a video 3D foundation model that incorporates physics insights to help create more lifelike character movements and expressions. Using text and existing photos or videos, Viggle users can specify a character and a type of movement they should perform. Viggle then uses AI to generate an animated video based on those requests.

Viggle's existing software targets a wide range of users, helping content creators and regular users quickly create animated character videos using prompts and streamlining the ideation and pre-production process for professional animation engineers, game designers and visual effects artists.

According to Chu, Viggle currently has two main types of users: people who are using it as a new tool for making memes, and professionals, from creatives to film and game studio employees, who are using it as a tool for creating and visualizing content. To support the latter group, Viggle recently launched a Creator Program, which includes a Pro subscription, an additional 1,000 credits – the equivalent of 250 minutes of video – early access to new features, and opportunities to connect with other creatives, among other things.

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Chu acknowledged that the AI ​​video generation market has become competitive, but claimed that Viggle's performance in terms of controllable video generation is currently unique. While general text-to-video models are good in the ideation phase, he argued that Viggle's model today “really shines in the post-production phase.”

Chu is a former PhD student at the University of Toronto who studied computer vision and machine learning under Raquel Urtasun of Waabi and Sanja Fidler of Nvidia. He has also previously worked as a researcher at Autodesk, Facebook, Nvidia and Google.

TSFV co-founder and general partner Eva Lau described Chu to BetaKit as an “exceptional founder with deep technical expertise,” adding that the technology underlying Viggle’s JST-1 core model is also “extremely unique and very difficult for others to replicate.”

“We're essentially building a graphics engine with neural networks,” Chu said. While Viggle started with a character model, he noted that the startup plans to add more features over time, including the ability to generate objects, character-object interactions and eventually entire scenes.

Chu compared the startup's existing offering to a prototype. “This is a proof of concept that it can work,” he said, adding that the startup is training stronger models to handle more complex queries and improve the quality of the videos it can generate, which is limited at the moment due to shaky character movements and unchanging facial expressions.

When asked if he thinks Viggle's technology will replace or support human labor, Chu replied, “We're trying to empower and support creators rather than replace their creativity.” He stressed that the startup's focus is on providing users with tools to streamline the process of creating animated videos – not on completely automating it.

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Viggle's rapid growth also brought its own challenges, from managing the fast-growing Discord to high demand that led to longer wait times in some cases. Chu noted that the startup is working to ensure it has the capacity to meet users' needs and thanked Discord and its moderators for helping to serve its large online community.

TSFV, which focuses on early-stage deep-tech startups, announced the final close of its third fund, valued at $41 million CAD, two months ago. Viggle joins a TSFV portfolio that also includes fellow Toronto-based AI startup Ideogram, a midjourney competitor that closed its own $80 million Series A funding round and launched its latest text-to-image model in February.

The venture capital (VC) firm was founded by husband and wife team Allen and Eva Lau, formerly of Wattpad, a Toronto-based social storytelling platform that was acquired by South Korean company Naver for more than 754 million Canadian dollars in 2021. Allen Lau, co-founder and former CEO of Wattpad, is now managing partner of TSFV, while Eva Lau, previously head of community and content at Wattpad, currently leads TSFV.

AI has also been a focus for a16z recently. In April, the platform-agnostic VC giant closed $7.2 billion for its latest fund, including some big investments in the AI ​​space, with $1.25 billion earmarked for AI infrastructure and $1 billion for AI apps. The company has also reportedly stockpiled coveted AI chips to help it win deals in the space.

RELATED: Midjourney competitor Ideogram closes $80 million Series A and launches latest text-to-image model

While the broader technology market cooled amid the overall economic downturn and many other startups and fund managers struggled to raise capital, AI continued to be an in-demand trend. These conditions benefited Canadian companies like Radical Ventures and startups like Viggle, Ideogram, and Toronto-based large-scale model developer and OpenAI competitor Cohere.

However, since the AI ​​funding frenzy began following OpenAI's release of ChatGPT in late 2022, some investors have become more cautious about AI and the amounts spent on it, and ChatGPT's growth has stalled. In June, David Wong, chief product officer at Thomson Reuters, told BetaKit, “Now is the reality check,” as enterprise buyers have become more sophisticated and have started to come to terms with where AI works and where it doesn't.

While the broader technology market has cooled, AI has remained a hot topic.

But Viggle's investors are optimistic about the startup's prospects given its approach and progress so far. In a statement, a16z partner Justine Moore noted that the company was impressed by Viggle's early momentum and the user base it has built in just a few months.

Eva Lau called Viggle's recent growth “whiplash-inducing.” She claimed TSFV became aware of Viggle and began talks with the startup in March, when it already had thousands of users.

She claimed that Viggle's JST-1 technology is “the world's first 3D video core model with true physics understanding” and argued that it “gives Viggle AI a tremendous first-mover advantage.”

Allen Lau, who has joined Viggle as an advisor, told BetaKit he sees the possibility of Viggle becoming more than just a simple meme generator and “causing massive disruption in the content creation space.” The tech entrepreneur-turned-investor plans to draw on his decades of experience building and running Wattpad and other startups to back Viggle, which he believes “will be the next big Canadian AI superstar.”

Cover image courtesy of Viggle AI.