AI’s ability to reinvent web search remains murky, but the technology’s impact on everyday tools seems more promising. Case in point: A startup called Capsule has used AI in video editing software to improve the speed and efficiency of post-production edits. After the AI-powered editor launched in beta, the company raised $4.75 million in seed funding to commercialize the product.
Longer term, according to Capsule, anyone with such technology could be creative with video, even if they’re not a professional video editor.
The company hasn’t always been into AI technology. Founded in 2020, Capsule grew out of the same team that built the animated GIF capture tool and social network Phhhoto, which it eventually lost to Instagram’s clone, Boomerang. After discontinuing their app in 2017, they transitioned to an experiential live event marketing company called Hypno. But they soon had to turn around when the COVID-19 pandemic ended the need for Hypno’s personal photo booths and other interactive experiences.
That led to the creation of Capsule, a platform that began as a way for brands to reach their communities in the post-COVID era through 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 several Angels.
The company isn’t necessarily trying to use AI to take over the work of video editors. It says 90% of its revenue comes from the enterprise, but particularly an underserved market of enterprise teams with no video expertise who still need consistency in branding. The video platform has been used by companies such as Snowflake, TED, Salesforce and The Wall Street Journal, among others.
More recently, Capsule began exploring how new AI models could improve its product.
Citing data from HubSpot, the company points out that short-form video will grow faster than any other format by 2023, with more than 90% of marketers saying they plan to maintain or increase their investment in video creation . But the demand for video is outpacing the supply of professional video editors, said Champ Bennett, co-founder and CEO of Capsule.
“Despite the sheer number of video tools on the market, the needs of corporate teams are 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 complexity of making it.”
To address these challenges, Capsule built AI Studio, which focuses on AI-driven post-production video editing.
The company showed a demo of the technology in December (see below), which uses AI and machine learning in several models, including an ASR (automatic speech recognition) model for transcribing the video’s audio into text.
It also provides a diffusion model for generating B-roll images from the transcript, as well as a generative LLM (Large Language Model) that summarizes text from the transcript.
The AI Studio software runs in the browser, with no app or extension required to work, the company says.
After uploading a video to the platform, Capsule creates the transcript, which is placed on the side of the video for use in edits. In the demo, the company showed how a user can select a block of text and then click a button to automatically summarize and convert the text into a title card, using AI and the video markup language. Several card styles are 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.
It also showed how to select a block of text and then have AI automatically generate an image based on the topic identified in the highlighted text. In addition, you can click in the text prompt field and adjust the text for more precise control over the final results.
Another feature lets you select a line of text to make it appear as one of several available caption styles, such as 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 do for coding,” Bennett tells AapkaDost. “We do not own the models. Instead, we’re leveraging best-in-class models to make creators 10-100x more productive while lowering the barrier to entry so marketing, sales, success and leadership teams can create compelling on-brand videos themselves.”
The edits themselves are powered by Capsule’s video scripting language, CapsuleScript, which has been built and designed over the last few years to work in the browser. All output from the AI model is fed into CapsuleScript as input.
“Remember what HTML/CSS is to websites, CapsuleScript is to video. It can dynamically render video both on-the-fly and on-the-fly, enabling personalized video at scale for the first time,” says Bennett. But he clarifies that Capsule’s customers aren’t looking for a fully automated “one-click” solution, even if CapsuleScript could do that.
“In reality, customers actually want 80% automation and 20% customization so they can tell a unique, creative story without much friction,” he explains.
After the demo was posted, the company had to put access to AI Studio behind a waitlist due to demand, the company said.
With the additional funding, Capsule says it aims to hire key employees in engineering, product design and marketing teams to accelerate the commercialization of the AI Studio product. It is looking for a dozen full-time employees, including an ML engineer, front-end engineer, head of video and marketing, and product designer.
Investors backing the company in the new seed round that closed at the end of January include Human Ventures, Swift Ventures, InVision founder Clark Valberg’s Tiferes Ventures, Behind Genius Ventures, plus pre-seed investors Array Ventures and Bloomberg Beta.
Angel investors include Amjad Masad, CEO of Replit, Arash Ferdowsi, CTO of Dropbox, Kyle Parrish, Head of Sales at Figma, Former Head of Audio and Video at Spotify/Anchor Founder Mike Mignano, Co-Founder of Chorus.ai, Roy Ranani , and Gumroad founder Sahil Lavingia.
The company declined to share its statistics regarding revenue or total customers, but said it plans to announce the latter “soon”.
Including the new funding, the New York-based startup has raised $6.75 million since its inception.