📶 Benchmark bets big on HeyGen

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When Benchmark invests, we pay attention.

Their latest bet is into HeyGen, a company that helps create avatars and voices for sales and marketing content.

There are a few things about the round that stand out, and we break down the news and give our two cents in this week’s piece.

TL;DR:

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NEWS
Benchmark bets big on AI videos 🎥

Benchmark is leading a $60m round into HeyGen, a three-year-old company that creates AI-generated avatars and voices for videos. The round values the company at $500m post-money.

Why it matters: 

When we saw this news, three things went through our heads:

1. Benchmark is leading - pay attention. Benchmark’s model consists of taking fewer high-conviction bets. Whenever they get involved, it’s a strong stamp of approval.

2. China ties = lots of unknowns. The company, originally named Surreal, was founded in China but has since relocated its HQ to LA. The company’s early funding also came from Chinese investors. US ties with China are already on edge, and we’re in an election year.

3. The markup. This round is six times higher than the company’s valuation from four months ago. Sometimes markups like that are justified; other times they are a sign of a bubble.

What happens next: 

It’s hard to imagine a world where these types of tools aren’t mass-adopted by sales teams across the world.

That’s obvious.

The secondary effects of these tools aren’t obvious.

During an election year, how can tools like these be used to influence outcomes? To that point, what is the level of concern about the company being owned by a foreign national?

That all remains to be answered, but in the meantime, expect to start getting more emails from sales teams with this type of customization.

LINKS

🧐 David Oglivy philosophy: Business ideas from the king of advertising

👨‍💻 VC fund stacks: Crowdsourced recs on what other funds are using

🔄 VC workflows: How funds are automating their work

⌛️ Lessons from humanity: 41 lessons from studying years of humans

➡️ Lessons from Elad Gil: 13 lessons from one of the best angel investors in the world

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Thanks for reading this far and giving us a little bit of your attention this week.

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- Clay

P.S. Here are the results from our poll question in last week’s piece:

Are you still actively investing in companies that come out of YC?

🟨🟨🟨🟨🟨⬜️ Yes - absolutely ✅ (34)

🟩🟩🟩🟩🟩🟩 No - not a chance ❌ (36)

70 Votes

via @beehiiv polls